City of Mountain View ACFR 2023 - 2024

Mountain View, CA

City of Mountain View

Mountain View, California Annual Comprehensive Financial Report

For the Fiscal Year Ended June 30, 2024

Prepared by: Finance and Administrative Services Department

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November 22, 2024

OFFICE OF THE CITY MANAGER

500 Castro Street, P.O. Box 7540

Mountain View, CA 94039‐7540

650‐903‐6301 | MountainView.gov

Honorable Mayor, City Council, and Members of the Mountain View Community:

I submit for your information and consideration the Annual Comprehensive Financial Report (ACFR) of the City of Mountain View (City) for the fiscal year ended June 30, 2024.

FACTORS AFFECTING FINANCIAL CONDITION

The local economy has fully recovered to COVID‐19 prepandemic levels. The City’s major revenues have generally remained strong and have benefited from inflation as well as the increase in interest rates but are not increasing at the same rate as prior fiscal years. Thanks to the leadership of the City Council and through the support and hard work of the Executive Leadership team and our outstanding City employees, we have provided an exceptional level of service to our community while maintaining fiscal stability during the fiscal year.

While revenues have recovered, expenditures are outpacing revenue growth. As a result, we are cautiously optimistic about the future fiscal health of the City. However, continued uncertainty surrounding inflationary pressures, elevated interest rates, transitioning national economic policies, and geopolitical conflicts cloud the economic picture. These all contribute to the likelihood of slower‐paced growth in the future.

The current General Operating Fund Forecast indicates sufficient financial resources to maintain the Mountain View of today, but building the Mountain View of tomorrow will require that we continue to enhance and diversify the City’s revenue streams to maintain ongoing fiscal stability and accomplish bold initiatives the City is advancing.

On November 5, 2024, Mountain View residents overwhelmingly supported the vision for the Mountain View of tomorrow and passed a proposed ballot measure, Measure G, by 72% to create an additional tier to the existing property transfer tax for transactions over $6.0 million. Per City Council direction, this additional source of revenue will be dedicated to the following funding priorities for the next 10 years:

• Public Safety Facilities;

• Parks, Open Space, and Biodiversity;

• Affordable Housing; and

• Other general governmental services, including road maintenance, active transportation, small business support, and homeless support services, among others.

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 2 of 14

FINANCIAL INFORMATION

As we move ahead, it is my pleasure to present the City’s Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2024. The ACFR has been prepared in conformity with the principles and standards for financial reporting set forth by the Governmental Accounting Standards Board (GASB) and in compliance with the City Charter, Section 1106.

Though the audit is conducted by an independent certified public accounting firm, City management assumes full responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures. We believe the data, as presented, is accurate in all material respects, that its presentation fairly shows the financial position and the results of the City’s operations as measured by the financial activity of the City’s various funds, and, in conjunction with the included notes, will provide the reader with an understanding of the City’s financial activities and status.

To provide a basis for making these representations, City management has established a comprehensive internal control framework that is designed to protect the government’s assets from loss, theft, or misuse and to compile sufficiently reliable information for the preparation of the City’s financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP). Because the cost of internal controls should not outweigh its benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement.

The City’s books, financial records, and financial statements have been audited by Badawi & Associates, a firm of independent licensed certified public accountants, selected by and reporting to the City Council. The objective of the independent audit is to provide reasonable assurance that the financial statements of the City and related entities are free of material misstatement. The independent auditor concluded, based upon their audit, that there was a reasonable basis for rendering an unmodified “clean” opinion on the City’s basic financial statements as of, and for, the fiscal year ended June 30, 2024, and they are fairly presented in conformity with GAAP. The independent auditor’s report is presented at the beginning of the financial section of this report, on Page 1.

GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in a section entitled Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the report of the independent auditors. The notes to the financial statements are provided in the financial section and are considered essential to fair presentation and adequate disclosure.

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 3 of 14

The ACFR is divided into the following sections:

The Introductory Section includes this letter of transmittal, an overview of the organizational structure of the City, and prior awards received.

The Financial Section includes the following:

• Independent Auditor’s Report.

• Management’s Discussion and Analysis.

• Basic Financial Statements—Includes the government‐wide financial statements that present an overview of the City’s entire financial operations and the fund financial statements that present financial information for each of the City’s major funds as well as other governmental, proprietary, and custodial funds

• Notes to Basic Financial Statements—The notes provide additional information that is essential to a full understanding of the data provided in the government‐wide and fund financial statements.

• Required Supplementary Information—Includes schedules required to be presented, showing information related to the City’s pension plans and other postemployment benefits plan.

• Other Supplementary Information—Includes the Budgetary Schedule of the Park Land Dedication Capital Projects Fund, Combining Statements and Schedules of the nonmajor governmental funds, internal service funds, and custodial funds.

The Statistical Section includes tables containing historical financial data, debt statistics, and miscellaneous social and economic data of the City that may be of interest to potential investors in the City’s bonds and to other readers. The data includes 10‐year revenue and expenditure information as well as 10 years of net position/fund balance information.

This ACFR includes the results of financial activities of the primary government, which encompasses several enterprise activities as well as all of its component units: the Mountain View Shoreline Regional Park Community (Shoreline Community) and the City of Mountain View Capital Improvements Financing Authority (Financing Authority). Separate financial statements for the Shoreline Community are included following the Statistical Section. There is no legal requirement for a separate component unit report for the Financing Authority.

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 4 of 14

PROFILE OF THE GOVERNMENT

The City was incorporated on November 7, 1902. The City Charter was originally approved by voters in 1952 and requires the City to operate under a Council‐Manager form of government. Seven Councilmembers are elected at‐large for four‐year terms that are staggered, so three or four seats are filled at the general municipal election in November of every even‐numbered year. Continuous service on the City Council is limited to two consecutive terms. Each year, in January, Council elects one of its members as Mayor and another as Vice Mayor.

With a population of approximately 86,535 and occupying just over 12 square miles, Mountain View is situated in Silicon Valley, about 36 miles southeast of the City of San Francisco and 15 miles northwest of the City of San Jose.

The City provides the following full range of municipal services, which are reflected in this report:

•General government (city management, legal, human resources, information technology, and financial activities);

• Public safety (police and fire services);

• Public works (engineering, design, and utility maintenance);

• Community development (land use, development review, inspections, and affordable housing); and

• Culture and recreation (library, parks, recreation, performing arts, and golf course)

The City also provides water, wastewater, and solid waste utility enterprise activities, and the financial information regarding these activities is included in this report.

The financial reporting entity includes all funds of the primary government (i.e., the City) as well as its component units. The seven‐member City Council serves as the governing body of the Mountain View Shoreline Regional Park Community and the City of Mountain View Capital Improvements Financing Authority, although these agencies are legal entities separate from the City. These two agencies are considered component units of the City and are blended in the reporting entity. However, this does not mean the City assumes the obligations or liabilities of these entities, and they are budgeted and accounted for separately from the City.

No other agencies or activities associated with the City, or utilizing a name similar to the City, meet the established criteria for inclusion in the reporting entity and, accordingly, are excluded from this report

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 5 of 14

The City Council is required by the City Charter to adopt a budget by June 30 to be in effect for the ensuing fiscal year, which begins July 1. Budgets are approved at the fund and department level (legal level of control) and may not be exceeded without City Council approval. Transfers and adjustments between funds and capital projects must be submitted to the City Council for approval. The City Charter requires approval by five votes of the seven‐member City Council to amend the budget.

LOCAL ECONOMY

The City is centrally located in Silicon Valley and is serviced by several major freeways (U.S. 101, Interstate 280, State Route 85, and State Route 237) connecting the City to three international airports, shipping, and rail lines in the Bay Area. Mountain View is also a regional transportation hub and has transit stops for the Caltrain commuter train and Santa Clara Valley Transportation Authority (VTA) light rail system.

Even though the local economy has fully recovered to COVID‐19 prepandemic levels, the City is not experiencing revenue growth at the same level as the prior fiscal year. The only General Fund revenues that are significantly higher than expected are property taxes and use of money and property (investment and rental income). Overall, total General Fund revenue decreased from $234.0 million in Fiscal Year 2022‐23 to $221.1 million in Fiscal Year 2023‐24, a decrease of $12.9 million, or 5.5%. Except for property taxes and use of money and property, all major General Fund revenues experienced a decline in Fiscal Year 2023‐24, when compared to Fiscal Year 2022‐23.

Even though the City finances have fully recovered, the local business community continues to see lingering impacts from the COVID‐19 pandemic. As businesses grapple with hybrid and remote workforce strategies, commercial real estate vacancy rates continue to remain elevated and corporate layoffs persist. Office vacancy rates in Silicon Valley were estimated to be 16.8% between July and September 2024, with Mountain View estimated to be 21.6% for the same time period, according to Colliers, a commercial real estate firm.

Another indicator of the local economy’s health is unemployment. The unemployment rate in Mountain View in September 2024 was estimated to be 3.3% compared to the prior‐year rate of 2.8% for the same month, reflecting the relative continued strength of employment in the local region, especially when compared to the unemployment rate of the State of California as a whole. Unemploym ent rates in the area are expected to continue to increase as corporate layoffs continue to occur. In addition, a tight labor market could also push the unemployment rate up. Per the UCLA Anderson forecast, the “labor force decline is attributable to retirements, migration out‐of‐state, and individuals choosing to spend their time in nonmarket activities, such as child‐raising.”

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 6 of 14

Unemployment Rates

Despite various financial challenges that have arisen in the past, the City has a history of maintaining prudent fiscal practices and budget discipline that has enabled the City to consistently maintain its AAA credit rating. The rating reflects the City’s sizeable property tax base, substantial revenue generated annually by the numerous commercial and residential leases in which the City is the lessor, and a positive financial position supported by strong reserve levels and a very modest debt burden.

The economic vitality of the City relies upon a strong and diversified business community that is flexible enough to withstand economic challenges. As part of the City’s economic development efforts, the City works to attract and retain companies with growth potential and make the City a desirable location for the corporate community. As a result, Mountain View continues to be recognized as a prime location in Silicon Valley in which to live and work. Mountain View’s innovation economy includes major technology companies, including Google, Intuit, LinkedIn, Microsoft, Samsung, Siemens Medical Solutions, and Synopsys. Downtown Mountain View is a key location for businesses, especially start‐up companies, because of the diverse number of retailers, restaurants, and convenient access to public transportation.

The City is also committ ed to preserving its existing services and programs while investing in the future through prudent budgeting and infrastructure development. During the past decade, the City experienced a strong economy that, together with sound fiscal planning, has allowed the City to increase resources where needed and to pay down pension and other postemployment benefit obligations. It has also allowed for the maintenance of adequate reserves for times of economic downturn.

Mountain View California

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 7 of 14

Property Tax

Property tax accounts for 36.7% of total General Fund revenues and is a key indicator of the City’s economic outlook. For reference, property tax revenue accounted for 33.8% of total General Fund revenues in Fiscal Year 2022‐23. Property tax revenue in the General Fund totaled $81.1 million in Fiscal Year 2023‐24 compared to $79.0 million in Fiscal Year 2022‐23, an increase of $2.1 million, or 2.6%. Even though property tax revenue has experienced significant growth over the past five years, future growth is expected to be nominal.

Property Tax Revenue ‐ General Fund (in millions)

$10.0 $20.0

$0.0

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 8 of 14

The median sales price of single‐family residences was $2.5 million for the quarter ended September 30, 2024. As can be seen in the chart below, this price has remained relatively stable since decreasing from a high of $2.9 million for the quarter ended March 31, 2022.

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0

3/31/20219/30/20213/31/20229/30/20223/31/20239/30/20233/31/20249/30/2024

Source: HdL Coren & Cone

Mountain View Detached Single‐Family Residential Full Value Sales

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 9 of 14

Even though median sales prices continue to hover around $2.5 million and 30‐year fixed mortgage rates hit a high of nearly 8% in October 2023, the number of home sales in the local housing market have rebounded, after experiencing a decrease in Fiscal Year 2022‐23. There were 262 single‐family home sales in Fiscal Year 2022‐23, compared to 227 in Fiscal Year 2021‐22, an increase of 35, or 15.4%.

Number of Mountain View Detached Single‐Family Residential Full Value Sales

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 10 of 14

Use of Money and Property

Use of money and property, which consists primarily of lease revenue and investment earnings, is an important source of General Fund revenue and accounts for 23.3% of total General Fund revenues. For reference, use of money and property revenue accounted for 20.3% of total General Fund revenues in Fiscal Year 2022‐23. This revenue source generated $51.4 million in Fiscal Year 2023‐24, an increase of $3.9 million, or 8.2%, when compared to Fiscal Year 2022‐23. Use of Money and Property revenue is projected to experience a nominal increase in Fiscal Year 2024‐25 as the City’s investment portfolio continues to earn higher investment returns.

$60.0

$50.0

$40.0

$30.0

$20.0

$10.0

$0.0

Use of Money and Property Revenue ‐ General Fund (in millions)

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 11 of 14

Sales

Tax

Sales tax is another important source of General Fund revenue as it accounts for 11.1% of total General Fund revenues. For reference, sales tax revenue accounted for 10.9% of total General Fund revenues in Fiscal Year 2022‐23. Sales tax revenue in the General Fund totaled $24.5 million in Fiscal Year 2023‐24 compared to $25.4 million in Fiscal Year 2022‐23, a decrease of $0.9 million, or 3.5%. Sales tax revenue is projected to stay relatively flat for Fiscal Year 2024‐25.

Sales Tax Revenue ‐ General Fund (in millions)

$30.0

$25.0

$20.0

$15.0

$10.0

$5.0

$0.0

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 12 of 14

LONG‐TERM FINANCIAL PLANNING

The City annually prepares a five‐year forecast for its General Operating Fund and, periodically, a Long‐Range Financial Forecast to project revenue and expenditure trends for the next 10 years. As part of the Fiscal Year 2024‐25 Adopted Budget, a Five‐Year Financial Forecast (Forecast) was developed for Fiscal Years 2024‐25 through 2028‐29. A financial forecast, even with fluctuating economic variables, can assist with the identification of long‐term financial trends, causes of fiscal imbalances, future fiscal challenges, opportunities, and potential requirements; all of which may assist in keeping the City on a continuing path of fiscal sustainability. While it is challenging to accurately forecast revenues due to the variable nature of the revenue sources and their connection to regional, state, national, and international economic conditions, it is possible to identify reasonable financial trends and provide a conceptual financial picture that will be useful to the City’s decision‐making. The Forecast guides the City as it continues to confront the need to balance expenditures and revenues.

The General Fund Forecast projects a modest positive‐ending operating balance for Fiscal Year 2024‐25. However, subsequent fiscal years are projected to result in modest operating deficits. Should the projected deficits come to fruition, maintaining operating and emergency reserves during the period will help the City withstand possible future economic downturns.

Estimated General Operating Fund Operating Balance (in millions)

$1.0

$0.0

($1.0)

($2.0)

($3.0)

($4.0)

($5.0)

$2.0 FY 2024‐25FY 2025‐26FY 2026‐27FY 2027‐28FY 2028‐29

In summary, the City weathered a challenging fiscal environment and has emerged stronger as key City revenues have surpassed prepandemic levels. However, local economic indicators are projecting a flattening of revenues with slower‐paced growth anticipated in Fiscal Year 2024‐25, following strong revenue growth in the past several fiscal years. Uncertainty with inflation, interest rates, national and state economic policies, and geopolitical conflicts all contribute to the projected slower‐paced growth. In contrast, expenditures are expected to grow at a faster pace than revenues for the foreseeable future due in large part to anticipated increases in operational costs.

Honorable Mayor, City Council, and Members of the Mountain View Community

November 22, 2024

Page 13 of 14

RELEVANT FINANCIAL POLICIES

The City Council has established a financial and budgetary policy framework which is reviewed and updated as necessary by the City Council. A comprehensive and consistent set of financial and budgetary policies provides a basis for sound financial planning, identifies appropriate directions for service‐level developments, aids budgetary decision‐making, and serves as an overall framework to guide financial management and operations of the City.

The City’s adoption of financial policies also promotes public confidence and increases the City’s credibility in the eyes of bond‐rating agencies and potential investors. Such policies also provide the resources to react to potential financial emergencies in a prudent manner.

APPROPRIATIONS LIMIT

Article XIIIB of the California State Constitution, which became effective in Fiscal Year 1979‐80, and which was modified (by Proposition 111) in November 1989, establishes, by formula, an appropriation limit for governmental agencies. Using the appropriations of Fiscal Year 1978‐79 as the base year, the limit is modified by the growth in inflation and population during each fiscal year. Inflation is measured as the year‐over‐year growth in per‐capita personal income while population growth is based on a weighted growth measure that blends growth in the civilian population with growth in K‐12 and community college average daily attendance. Article XIIIB also sets the guidelines as to what is to be included in the appropriation limits.

The City’s appropriation limit for Fiscal Year 2023‐24 was $356,727,282; the City’s actual appropriations subject to the limit were $133,942,950, far below the limit. The Fiscal Year 2023‐24 appropriation limit increased from $342,417,977 in Fiscal Year 2022‐23 due primarily to the increase of 4.44% in California’s per‐capita personal income over the prior year, one of the factors used in calculating the change in the appropriation limit.

Honorable Mayor, City Council, and Members of the Mountain View Community November 22, 2024

Page 14 of 14

AWARDS AND ACKNOWLEDGMENTS

The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023. This was the 34th consecutive year the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City had to publish an easily readable and efficiently organized ACFR that satisfied both GAAP and applicable legal requirements. The GFOA award is valid for a one‐year period only. I believe our current ACFR continues to meet the program’s requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate.

In addition, the City also received the GFOA’s Distinguished Budget Presentation Award for the City’s annual budget document for Fiscal Year 2023‐24. In order to qualify for this Distinguished Budget Presentation Award, the government’s budget document had to be judged proficient as a policy document, a financial plan, an operations guide, and a communication device.

Special recognition is extended to Arn Andrews, Assistant City Manager; Derek Rampone, Finance and Administrative Services Director; Grace Zheng, Assistant Finance and Administrative Services Director; and the entire staff of the Finance and Administrative Services Department for their dedication to all City departments, residents, and customers on a daily basis. The preparation of this report could not have been achieved without the skillful, dedicated, and efficient services of the entire staff of the Finance and Administrative Services Department. In particular, Helen He, Accounting Manager; Janet Shum, Senior Accountant; and Marichi Valle, Accountant, were instrumental in preparing the ACFR accurately and in a timely manner. Every member of the department deserves recognition and thanks for their commitment to the City and their profession. I would also like to thank the members of the City Council and Council Finance Committee for their leadership and policy guidance in managing the financial operations of the City in a fiscally responsible manner that continues to serve in the best interests of the residents of the City.

Respectfully submitted,

Kimbra McCarthy City Manager

CITY OF MOUNTAIN VIEW

CALIFORNIA

CITY OFFICIALS

CITY COUNCIL

Patricia Showalter Mayor

Lisa Matichak Vice Mayor

Margaret Abe-Koga Councilmember

Alison Hicks Councilmember

Ellen Kamei

Councilmember

Lucas Ramirez Councilmember

Emily Ann Ramos

EXECUTIVE STAFF

Councilmember

Kimbra McCarthy City Manager

Jennifer Logue City Attorney

Heather Glaser City Clerk

Audrey Seymour Ramberg

Arn Andrews

Assistant City Manager

Assistant City Manager

Lenka Wright Chief Communications Officer

Danielle Lee Chief Sustainability and Resiliency Officer

Christian Murdock Community Development Director

Roger Jensen CIO/Information Technology Director

John Marchant Community Services Director

Kimberly Thomas Deputy City Manager

Derek Rampone Finance and Administrative Services Director

Juan Diaz Fire Chief

Wayne Chen Housing Director

Maxine Gullo Human Resources Director

Tracy Gray Library Director

Michael Canfield Police Chief

Dawn Cameron Public Works Director

City Government Organization

Mountain View Residents Mountain View City Council CityManager CityClerk CityAttorney City Manager’s Office

City Boards, Commissions & Committees

Environmental Planning Commission

Board of Library Trustees

Parks and Recreation Commission

Rental

Human

Performing

For its Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2023

Executive Director/CEO

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INDEPENDENT AUDITOR’S REPORT

To the Honorable Mayor and Members of the City Council of the City of Mountain View Mountain View, California

Report on the Audit of the Financial Statements

Opinions

We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Mountain View (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund, Shoreline Regional Park Community Fund, and the Housing Fund, for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

To the Honorable Mayor and Members of the City Council of the City of Mountain View

Mountain View, California

Page 2

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

 Exercise professional judgment and maintain professional skepticism throughout the audit.

 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.

 Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

To the Honorable Mayor and Members

of the City Council of the City of Mountain View

Mountain View, California

Page 3

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, and the required pension and OPEB information schedules, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The individual and combining fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The individual and combining fund financial statements and schedules are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the individual and combining fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information

Management is responsible for the other information annual financial report. The other information comprises the introductory section, statistical section, and component unit financial statements section but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

To the Honorable Mayor and Members of the City Council of the City of Mountain View

Mountain View, California

Page 4

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated November 22, 2024 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs Berkeley, California November 22, 2024

CITY OF MOUNTAIN VIEW, CALIFORNIA

Management’s Discussion and Analysis (MD&A) (Unaudited)

For the Fiscal Year Ended June 30, 2024

This section of the City of Mountain View’s (City) Annual Comprehensive Financial Report (ACFR) presents a narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2024. We encourage readers to consider the information presented here in conjunction with additional information that has been furnished in our Letter of Transmittal and Basic Financial Statements and to recognize that the financial statements focus on past results compared to the City’s operating budget, which focuses on future goals and allocation of resources.

FINANCIAL HIGHLIGHTS

Key financial highlights for the fiscal year are outlined below. Details can be found in the Government‐Wide Financial Analysis the Financial Analysis of the City’s Funds sections of this MD&A.

• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the fiscal year ended June 30, 2024 by $1.6 billion (net position). Of this amount, $229.3 million represents unrestricted net position, which may be used to meet the City’s ongoing obligations.

• The City’s total net position increased by $98.8 million compared to the increase of $112.0 million in the prior fiscal year, a decrease of 11.8% in the current fiscal year when compared to the prior fiscal year. Of this amount, $85.2 million was generated by governmental activities and $13.6 million by business‐type activities. Overall, citywide expenses were up $31.1 million, while revenues were only up $17.2 million.

• The City’s total outstanding long‐term debt decreased modestly by $1.5 million in the current fiscal year, primarily due to scheduled debt service payments, offset by increases in landfill containment and claims liabilities.

• The City’s net pension liabilities increased by $12.9 million, a relatively small increase compared to last year’s increase of $128.8 million. This is primarily attributed to positive investment earnings experienced in FY 2022‐23 and realized in Fiscal Year 2023‐24. In the prior fiscal year, CalPERS experienced a negative 6.1% return on investments, which was the main driver of the large increase in the pension liability last year. Net other post‐employment benefit (OPEB) liabilities decreased by $2.2 million due to the same reason.

• The City’s governmental funds reported total fund balances of $1.0 billion, an increase of $70.0 million, or 7.2% from the prior fiscal year. The increase is mainly in the General Capital

Project Funds due to funding of projects that haven't started yet or are in the early stages of construction.

• The total fund balance of the General Fund was $238.7 million, an increase of $2.1 million, or 0.9% from the prior fiscal year. Approximately $133.3 million of this amount, or 55.9%, represents unassigned fund balance which is available to meet the City’s current and future needs. This unassigned fund balance has been designated for future one‐time expenditures, one‐time payments toward unfunded liabilities, and emergency funds and is 70.6% of total General Fund expenditures for the fiscal year ended June 30, 2024. This is an increase from 69.2% of total General Fund expenditures in the prior fiscal year.

OVERVIEW OF THE FINANCIAL STATEMENTS

This Discussion and Analysis document is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: (1) government‐wide financial statements; (2) fund financial statements; and (3) notes to the basic financial statements. This report also contains required and other supplementary information in addition to the basic financial statements themselves.

Government‐Wide Financial Statements

The government‐wide financial statements are designed to provide readers with a broad overview of the City’s finances in a manner similar to a private‐sector business.

The Statement of Net Position presents information on all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference between them reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the overall financial position of the City is improving or deteriorating.

The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses pertaining to earned, but unused, vacation and sick leave.

Both of the government‐wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business‐type activities). The governmental activities of the City include general government, public safety, public works, community development, and culture and recreation. The business‐type activities of the City include water, wastewater, and solid waste operations (enterprise funds).

The government‐wide financial statements include not only the City itself (known as the primary government) but also two legally separate entities for which the City is financially accountable: (1) Mountain View Shoreline Regional Park Community (Shoreline Community or SRPC); and (2) City of Mountain View Capital Improvements Financing Authority (Financing Authority). Although legally separate from the City, these component units are blended with the primary government because they have the same governing board as the City and because of their financial relationship with the City. In addition, separate financial statements for the Shoreline Community component unit are included within the City’s ACFR.

Fund Financial Statements

The fund financial statements are designed to report information about groupings of related accounts, which are used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other State and local governments, uses fund accounting to ensure and demonstrate compliance with finance‐related legal requirements. All of the funds of the City can be divided into the following three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government‐wide financial statements. However, unlike the government‐wide financial statements, governmental fund financial statements focus on near‐term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in determining what financial resources are available in the near future to finance the City’s programs.

Because the focus of governmental funds is narrower than that of the government‐wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government‐wide financial statements. By doing so, readers may better understand the long‐term impact of the government’s near‐term financing decisions. Both the governmental funds Balance Sheet and the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains several individual governmental funds organized according to their type (special revenue, debt service, and capital projects funds). Information is presented separately in the governmental funds Balance Sheet and in the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund, Shoreline Regional Park Community Fund, Housing Fund, General Capital Projects Fund, and Park Land Dedication Capital Projects Fund, all of which are considered to be major funds. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report.

The City adopts an annual appropriated budget for most of its funds except the General Capital Projects Fund, which is budgeted on a project basis. Budgetary comparison statements and schedules have been provided for these funds to demonstrate compliance with budgets.

Proprietary funds are generally used to account for services for which the City charges customers, either external customers or internal customers or departments of the City. Proprietary funds provide the same type of information as shown in the government‐wide financial statements, only in more detail. The City maintains two different types of proprietary funds.

Enterprise funds are used to report the same functions presented as business‐type activities in the government‐wide financial statements. The City uses enterprise funds to account for its water, wastewater, and solid waste operations, all of which are considered to be major funds of the City.

Internal service funds are used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its equipment maintenance and replacement, Retirees’ Health Plan, Employee Benefits Plan, and various other self‐insurance liability programs. Because these services predominantly benefit governmental rather than business‐type functions, they have been included within governmental activities in the government‐wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary funds financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.

Fiduciary funds are used to account for fiduciary activities and resources held for the benefit of individuals, organizations, or other governments that are not part of the City. These are comprised of custodial funds, which are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private‐purpose trust funds and include custodial balances and activities of the City’s labor unions, flexible benefits, and Center for Performing Arts. Since the resources of these funds are not available to support the City’s own programs, they are not reflected in the government‐wide financial statements.

Notes to the Basic Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the government‐wide and fund financial statements.

Other

Required Supplementary Information includes schedules required to be presented showing information related to the City’s pension plans and other post‐employment benefits plan.

Other Supplementary Information includes the combining statements and schedules of the nonmajor governmental funds, internal service funds, and custodial funds.

GOVERNMENT‐WIDE FINANCIAL ANALYSIS

Analysis of Net Position

A condensed summary of the City’s net position for governmental and business‐type activities is as follows:

Condensed Statement of Net Position (Dollars in Thousands)

42.2% of the City’s net position, amounting to $682.2 million, reflects its investment in capital assets (e.g., land, buildings, other improvements, etc.) less any related outstanding debt used to acquire or construct those assets. The City uses these capital assets to provide services to its residents and community members. Therefore, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be liquidated for these liabilities. The largest portion (43.6%) of the City’s net position, or $703.9 million, represents resources that are subject to external restrictions on how they may be used. The last portion of the City’s net position, $229.3 million (14.2%), represents unrestricted net position and may be used to meet the City’s ongoing obligations.

The City’s total noncurrent liabilities increased by $9.3 million, compared with the prior fiscal year, primarily due to an increase of net pension liability of $12.9 million, which is a moderate increase compared to the prior year’s increase of $128.8 million.

Analysis of Statement of Activities

The changes in net position for governmental and business‐type activities are as follows:

Condensed Statement of Activities (Dollars in Thousands)

2024202320242023 20242023 Revenues:

Governmental Activities

Program revenues such as charges for services, operating grants and contributions, and capital grants and contributions are generated from or restricted to each activity. General revenues are composed of taxes and other revenues not specifically generated by, or restricted to, individual activities. All tax revenues and investment earnings are included in general revenues

The following charts are graphical comparisons of governmental revenues by source for Fiscal Years 2023‐24 and 2022‐23:

Fiscal Year 2023‐24 Governmental Activities

Revenues by Source

Fiscal Year 2022‐23 Governmental Activities

Revenues by Source

Total Governmental Revenues increased to $366.4 million, a $12.9 million increase when compared to the prior fiscal year.

Revenue Highlights:

• Revenues from charges for services of $75.1 million, property taxes of $153.6 million, and investment income of $57.6 million were the three largest revenue sources for gonvermental activities. Together, these accounted for $286.3 million, or 78.1% of total revenue.

• Capital grants and contributions decreased by $13.8 million, primarily related to a one‐time park land dedication fee of $16.1 million received for the 777 West Middlefield Road project in Fiscal Year 2022‐23.

• Property taxes increased by $10.4 million over the prior fiscal year as the residential and commercial real estate markets continued to experience strong growth in assessed values.

• The investment income increased by $34.0 million over the prior fiscal year, mainly due to the unrealized gains on investments and the higher interest earnings resulting from the elevated interest rates being earned on investments.

The following charts are graphical comparison of the City’s governmental expenses by function for Fiscal Years 2023‐24 and 2022‐23. Please note the expenses do not include capital outlays as those are added to the City’s capital assets.

Fiscal Year 2023‐24

Governmental Activities

Expenses by Function

Expense Highlights

Fiscal Year 2022‐23

Governmental Activities

Expenses by Function

Total expenses increased to $279.7 million in the current fiscal year, an increase of $17.0 million, or by 6.5% compared to the prior fiscal year. The increase is mainly due to increases in salaries and benefits that include pension and OPEB expenses related to adjustments required by GASB Statement Nos. 68 and 75. Salaries and benefits are higher in the current fiscal year as a result of an increase in authorized positions, Council‐approved cost‐of‐living adjustments, an increase in benefit costs and higher additional pension UAL (unfunded Accrued Liability) payments.

Business‐Type Activities

Business‐type activities increased the City’s net position by $13.6 million compared to an increase of $22.3 million from the prior fiscal year. The significant key factors are as follows:

• Water net position increased by $3.2 million, primarily due to capital contributions of $1.9 million and investment income of $1.3 million.

• Wastewater net position increased by $8.6 million, primarily due to net operating income of $5.3 million, investment income of $1.5 million, and developer capital contributions of $1.0 million.

• Solid waste net position increased by $1.8 million, primarily due to net operating income of $1.4 million.

FINANCIAL ANALYSIS OF THE CITY’S FUNDS

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance‐related legal requirements.

Governmental Funds—The focus of the City’s governmental funds is to account for the near‐term inflows, outflows, and balances of resources that are available for spending. This information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. Types of governmental funds reported by the City include the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Project Funds.

At June 30, 2024, the City’s governmental funds reported combined ending fund balances of $1.0 billion, an increase of $70.0 million compared to the prior fiscal year. The components for the change are increases of $2.1 million in the General Fund, $22.8 million in the Shoreline Regional Park Community Fund, $8.5 million in the Housing Fund, and $39.8 million in the Capital Projects fund, offset by a decrease of $3.1 million in the Park Land Dedication Capital Projects Fund.

Total fund balance is comprised of an unassigned fund balance of $133.3 million that is available for spending at the City’s discretion. The remainder of the fund balance is nonspendable ($7.2 million), restricted ($776.0 million), committed ($115.6 million), and assigned ($5.3 million), none of which are available for new discretionary spending.

Total revenues for governmental funds were $364.8 million while expenditures were $290.6 million. The revenues were $74.2 million more than total expenditures.

The General Fund is used to account for all revenues and expenditures necessary to carry out basic government activities of the City that are not accounted for through other funds. At June 30, 2024, the unassigned fund balance of $133.3 million was $6.2 million higher than the prior fiscal year.

As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance of $133.3 million represents 55.9% of total fund balance, 70.6% of fund expenditures of $189.0 million, while total fund balance represents 126.3% of that same amount.

The fund balance of the City’s General Fund increased by $2.1 million during the current fiscal year. Total General Fund revenues decreased to $221.0 million, a decrease of $13.0 million over the prior fiscal year. The decrease is primarily due to decreases in intergovernmental revenues ($9.5 million) and charges for services ($3.5 million). Intergovernmental revenue decreased, primarily due to the receipt of $9.7 million in the ARPA (American Rescue Plan Act) grant fund in Fiscal Year 2022‐23, with no comparable large grants received in Fiscal Year 2023‐24. Charges for Services decreased, primarily due to a $1.3 million decrease in plan check fees revenue, resulting from reduced project activities, and the receipt of $1.1 million under an agreement with Google to reimburse the costs of two planners and two engineer limited‐term positions in the prior fiscal year.

General Fund expenditures increased by $5.4 million over the prior fiscal year, primarily due to the increase of $12.0 million in salaries and benefits costs, offset by a decrease in capital outlay of $6.5 million. The increase in salaries and benefits is due to positions added in Fiscal Year 2023‐24, merit and market salary rate adjustments, and pension contributions. The capital outlay decreased primarily due to the City’s $3.1 million contribution to residential development project at 777 West Middlefield Road and the addition of $3.8 million in leased assets in the prior fiscal year.

The following charts are graphical comparison between June 30, 2024 and 2023, for General Fund revenues by sources and expenditures by function:

Fiscal Year 2023‐24 General Fund Revenues by Source

Fiscal Year 2022‐23

Fiscal Year 2023‐24

Fiscal Year 2022‐23 General Fund

The Shoreline Regional Park Community Fund receives property taxes on properties within the Shoreline Community. The fund accounts for the revenues and expenditures of the Shoreline Community.

Revenues were $78.6 million for the fiscal year ended June 30, 2024, an increase of $14.2 million over the prior fiscal year. Revenues increased, primarily due to an $8.2 million increase in property tax revenues and a $6.1 million increase in investment earnings, driven by higher interest rates and unrealized gains during Fiscal Year 2023‐24.

Expenditures were $31.2 million compared to $28.5 million in the prior fiscal year. Of this amount, $25.4 million was expended on general government, which is $2.8 million higher when compared to the prior fiscal year.

In addition, $33.7 million was transferred out for capital improvement projects and debt service payments compared to $27.7 million in the prior fiscal year. The fund balance of $109.1 million as of June 30, 2024 is restricted for expenditures of the Shoreline Community.

The Housing Fund accounts for fees paid by developers to provide for increasing and improving the supply of extremely low‐, very low‐, low‐, and moderate‐income housing (affordable housing).

Revenues were $9.6 million for the fiscal year ended June 30, 2024, a decrease of $1.0 million from the prior fiscal year. The fund balance of $185.9 million is restricted for future affordable housing projects.

The General Capital Projects Fund accounts for all general capital improvements not funded from proprietary funds.

Revenues were $22.2 million for the fiscal year ended June 30, 2024, an increase of $19.2 million from the prior year, primarily due to $14.6 million increase in investment earnings and $5.0 million increase in intergovernmental revenue. Investment earnings increased as a result of higher interest rates and unrealized gains on investments during this fiscal year. The increase in Intergovernmental revenue was attributed to $1.7 million grants from Santa Clara County for the Magical Bridge Playground project and $2.3 million from Silicon Valley Transportation Measure B grants.

Expenditures were $54.9 million, which was $30.8 million less than the prior fiscal year. These funds were expended on capital outlay projects, including: Rengstorff Park Aquatics Center Replacement Design and Construction, All‐Inclusive Playground, and Rengstorff Park Maintenance and Tennis Buildings Replacement Design and Construction. The fund balance of $318.8 million is available to fund approved capital projects. The decrease in expenditures is attributed to the acquisition of 909 and 917 San Rafael Avenue property and the 87 East Evelyn Avenue lot, which took place in the prior fiscal year.

The Park Land Dedication Capital Projects Fund accounts for revenues derived from fees on residential subdivisions used for park and recreation projects.

Revenues were $3.8 million for the fiscal year ended June 30, 2024, a decrease of $13.9 million from the prior fiscal year. The decrease was primarily due to decreased developer contributions, which was partially offset by increased investment earnings. The developer contributions decreased due to the $16.1 million contribution received for the 777 West Middlefield Road project in the prior fiscal year. There was no expenditure incurred in the current year. The fund balance of $65.3 million is available for park and recreation projects.

Proprietary Funds—The City’s proprietary funds statements provide the same type of information found in the government‐wide financial statements but in more detail.

At the end of the fiscal year, the unrestricted net positions for the Water, Wastewater, and Solid Waste Funds are $61.6 million, $69.4 million, and $17.1 million, respectively. The total increase in net position for the enterprise funds from the prior fiscal year is $13.6 million. The net operating income of the Water Fund (negative $365,000) and Wastewater Fund ($5.3 million) decreased by $2.3 million and $2.4 million, respectively, when compared to the prior fiscal year. The decrease in the Water Fund is primarily due to the $4.0 million minimum water obligation payment, while the reduction in the Wastewater Fund is attributed to the higher usage at the Treatment plant. The Solid Waste Fund’s net operating income ($1.4 million) increased by $915,000 over the prior year. Factors concerning the finances of the enterprise funds have also been addressed previously in the discussion of the City’s business‐type activities. The internal service funds have an unrestricted net position of $38.9 million at June 30, 2024.

Fiduciary Funds—The City maintains fiduciary funds for fiduciary activities and assets held by the City in custodial capacity for the benefit of agencies outside of the City or employees. As of June 30, 2024, the assets of the custodial funds totaled $670,000, comparable to the prior fiscal year.

GENERAL FUND BUDGETARY HIGHLIGHTS

General Fund differences between the original Fiscal Year 2023‐24 budget and the final amended budget resulted in an increase of $651,000 in budgeted revenue (primarily related to Other Revenues) and a $13.4 million increase in expenditure appropriations. Approximately $7.7 million of the adjustment in expenditure appropriations is related to prior‐year encumbrances that carry forward at the beginning of the fiscal year as specified in the City Charter. An additional $1.5 million of appropriations was established for payment for building inspection and fire plan checking contract services related to development activity, which are cost‐recovered by fees paid by developers. An additional $1.7 million of appropriations was established for the payment of compensated absences. The balance of adjustments was made midyear for various operational needs not anticipated at budget adoption and grants or reimbursements received during the fiscal year.

General Fund actual revenues are $20.5 million or 10.2% higher than the final amended budget for the fiscal year. The variance is primarily due to the following revenues coming in higher‐than‐expected:

•Investment and lease interest income—$20.2 million higher (primarily noncash mark‐to‐market accounting adjustments for unrealized portfolio gains).

• Property tax revenues—$6.6 million higher.

•Other revenues—$1.0 million higher.

The above increases were partially offset by decreases in Other Taxes, Licenses, Permits and Fees, and Charges for Services.

Also contributing to the large variance is the City’s practice of analyzing and projecting revenues throughout the fiscal year but not typically adjusting the original revenue budget to match projections. In addition, the City does not generally budget for uncertain or one‐time revenues, such as Excess Educational Revenue Augmentation Funds (ERAF) and reimbursements, including adjusting the budget after receiving the revenue. Both of these practices can result in budgeted amounts that are much lower than actual amounts.

Actual expenditures for the General Fund are $34.4 million lower than the final amended budget for the fiscal year. The variance is primarily due to continued salary and benefit savings incurred from vacant positions and budgeted amounts for limited‐period funding, one‐time programs, and nondepartment costs being included in the final amended budget amounts, yet these types of costs are not typically fully expended within one year. It is anticipated that as the City ramps up recruitment of newly authorized positions and recently vacated existing positions, actual costs of salary and benefits will be more in line with budget amounts.

As a result of the higher than expected or budgeted revenues and expenditure budgets not being fully expended, the General Fund has experienced a positive budget versus actual variance.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

The City’s capital assets for its governmental and business‐type activities as of June 30, 2024 was $713.2 million (net of accumulated depreciation and amortization). Capital assets include land, leased assets, construction in progress, buildings, improvements other than buildings, machinery and equipment, subscription‐based IT arrangement (SBITA) assets, and infrastructure. The total net increase in the City’s capital assets as of June 30, 2024 is $30.3 million or 4.4%.

The change in capital assets, net of depreciation, for the governmental and business‐type activities are as follows:

Major capital asset activities during the current fiscal year included the following:

• Total capital assets increased by $30.3 million due to a net increase in assets of $67.6 million, offset by a $37.3 million net increases in accumulated depreciation and amortization.

• Construction in progress increased by $30.7 million. Some of the major projects worked on and/or completed during the year included: Rengstorff Park Aquatics Center Replacement Design and Construction, All Inclusive Playground, and Water and Sewer Replacement 101 at Two Locations Construction.

Additional information about the City’s capital assets is discussed in Note 6 to the financial statements.

Debt Administration

As of June 30, 2024, the City had $163.6 million of outstanding noncurrent liabilities related to governmental activities and $12.5 million related to business‐type activities, for a total of $176.1 million. Noncurrent liabilities outstanding as of June 30, 2024, with a comparison to prior year and the net change, are as follows:

De bt Outstanding (Dollars in Thousands)

The decreases to noncurrent liabilities were primarily due to the reduction of SBITA liabilities and scheduled debt service payments offset partially by the increase in Landfill Containment and Compensated Absences.

The City Charter limits bonded indebtedness for General Obligation bonds to 15.0% of the total assessed valuation of all real and personal property within the City. The City has no general obligation debt outstanding as of June 30, 2024 and has maintained its underlying “AAA” issuer credit rating from Standard & Poor’s since July 2014.

Additional information regarding the City’s noncurrent liabilities is discussed in Note 7 to the financial statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES

• The local economy has fully recovered to prepandemic levels. However, local economic indicators are projecting stable revenues with slower‐paced growth anticipated in Fiscal Year 2024‐25. Uncertainty with inflation, interest rates, national and state economic policies, and geopolitical conflicts all contribute to the projected slower‐paced growth.

• Overall, property taxes for the City are expected to increase in the upcoming fiscal year based on increases in property taxes from new development, change in ownership, and the 2.0% increase in assessed value due to the positive California Consumer Price Index.

• Sales tax revenue is expected to be about the same as the current fiscal year. However, a moderate increase is projected for future years.

•Business License revenue is projected to experience a 7.4% decline compared to the current fiscal year due to known and potential layoffs. Utility Users Tax (UUT) is projected to be 29.9% higher than the current fiscal year, mainly because of a potential refund claim that City has recorded as payable in Fiscal Year 2023‐24, which significantly lowered the current year revenue. Transient Occupancy Tax (TOT) is projected to increase by 7.7% compared to the current year. This increase is primarily due to one hotel’s failure to remit taxes in the current fiscal year for three quarters, which the City did not record as TOT revenue in the current fiscal year. Business travel has stabilized and is expected to remain stable in the near future, leading us to anticipate a moderate increase in TOT revenue.

• Cost‐of‐service studies were conducted for all three utility funds during the past year. As such, rates were adjusted to reflect the cost of services rather than across‐the‐board rate increases. The Fiscal Year 2024‐25 adopted rates for the Water, Wastewater, and Solid Waste Management Funds varied due to rate structure adjustments being phased in over multiple years, with impacts differing based on account type and billed usage.

All of these factors were considered in preparing the City’s budget for Fiscal Year 2024‐25.

REQUESTS FOR INFORMATION

These financial statements are intended to provide residents, taxpayers, investors, and creditors with a general overview of the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be directed to the Finance and Administrative Services Department, 500 Castro Street, P.O. Box 7540, Mountain View, California, 94039‐7540, or financeadmin@mountainview.gov.

BASIC FINANCIAL STATEMENTS

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City of Mountain View

June 30, 2024

(Dollars in Thousands)

City of Mountain View Statement of Activities

For the year ended June 30, 2024 (Dollars in Thousands)

Program Revenues

General Revenues:

Taxes:

Property taxes

Sales taxes

Transient occupancy taxes

Utility users tax

Nonregulatory franchise and business, unrestricted

Intergovernmental ‐ not restricted to specific programs

Investment income

Total taxes

Transfers

Total general revenues and transfers

Change in net position

Net position ‐ beginning of year

Net position ‐ end of year

GovernmentalBusiness‐Type

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City of Mountain View

June 30, 2024 (Dollars in Thousands)

GovernmentalGovernmental FundsFunds

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City of Mountain View

Reconciliation of the Governmental Funds Balance Sheet to the Government‐Wide Statement of Net Position

June 30, 2024

(Dollars in Thousands)

Amounts reported for governmental activities in the statement of net position are different because:

Capitalassetsusedingovernmentalactivitieswerenotcurrentfinancialresources. Therefore,theywerenotreportedintheGovernmentalFundsBalanceSheet. Exceptfortheinternalservicefundsreportedbelow,thecapitalassetswere adjusted as follows:

Internalservicefundswereusedbymanagementtochargethecostsofcertain activities,suchasinsurance,toindividualfunds.Theassetsandliabilitiesofthe InternalservicefundswereincludedingovernmentalactivitiesintheGovernment‐Wide Statement of Net

IntheGovernment‐WideFinancialStatements,deferredemployercontributionsfor pensionandOPEB,certaindifferencesbetweenactuarialestimatesandactual results,andotheradjustmentsresultingfromchangesinassumptionsandbenefits are deferred in the current year.

Long‐termliabilitieswerenotdueandpayableinthecurrentperiod.Therefore, they were not reported in the Governmental Funds Balance Sheet.

City of Mountain View

Governmental Funds

For the year ended June 30, 2024 (Dollars in Thousands)

FINANCING SOURCES (USES):

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City of Mountain View

For the year ended June 30, 2024 (Dollars in Thousands)

Amounts reported for governmental activities in the Government‐Wide Statement of Activities were different because:

Governmentalfundsreportedcapitaloutlay asexpenditures.However,intheGovernment‐WideStatementof Activities, thecostofthoseassetswasallocatedovertheirestimatedlivesasdepreciationexpense.Thiswastheamountofcapital assets recorded in the current period, net of the amount related to internal service funds.

DepreciationexpenseoncapitalassetswasreportedintheGovernment‐WideStatementofActivities,butdidnotrequire theuseofcurrentfinancialresources.Therefore,depreciationexpensewasnotreportedasexpendituresinthe governmental funds, net of the amount related to internal service funds. (29,607)

Accrued compensated leave payments were reported as expenditures in the governmental funds, however expense is recognized in the Government‐Wide Statement of Activities based on earned leave accruals. (656)

Repaymentsoflong‐termdebtarerecognizedasexpendituresinthegovernmentalfunds.Inthegovernment‐wide statements,repaymentsoflong‐termliabilitiesarereportedasreductionsofliabilities.Expendituresforrepaymentof principal portion of long‐term debt were.

Currentyearemployer pensioncontributions arerecordedasexpenditures inthegovernmentalfunds,however,these amounts are reported as a deferred outflow of resources in the Government‐Wide Statement of Net Position.

PensionexpenseisreportedintheGovernment‐WideStatementof Activities doesnotrequiretheuseof current financial resources, and therefore is not reported as expenditures in governmental funds. (46,860)

OPEBexpenseisreportedintheGovernment‐WideStatementof Activities doesnotrequiretheuseof current financial resources, and therefore is not reported as expenditures in governmental funds. 1,359

Someexpensesreportedinthestatementof activities donotrequiretheuseof current financialresourcesandtherefore are not reported as expenditures in governmental funds

Internalservicefundswereusedbymanagementtochargethecostsofcertainactivities,suchasinsuranceandfleet management,toindividualfunds.Thenetrevenueoftheinternalservicefundswasreportedwithgovernmental activities. 2,535 Change in Net Position of Governmental Activities 85,177 $

City of Mountain View

For the year ended June 30, 2024 (Dollars in Thousands)

Amounts

City of Mountain View

Statement of Revenues, Expenditures and Changes in Fund Balances

Shoreline Regional Park Community

For the year ended June 30, 2024 (Dollars in Thousands)

City of Mountain View

Statement of Revenues, Expenditures and Changes in Fund Balances

For the year ended June 30, 2024 (Dollars in Thousands)

City of Mountain View

Proprietary Funds

June 30, 2024 (Dollars in Thousands)

Business-Type Activities

City of Mountain View

Statement of Revenues, Expenses and Changes in Net Position

Proprietary Funds

For the year ended June 30, 2024 (Dollars in Thousands)

AND TRANSFERS:

City of Mountain View

Proprietary Funds

For the year ended June 30, 2024 (Dollars in Thousands)

For the year ended June 30, 2024 (Dollars in Thousands)

City of Mountain View

For the year ended June 30, 2024 (Dollars in Thousands)

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NOTES TO BASIC FINANCIAL STATEMENTS

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City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The City of Mountain View (City) was incorporated in 1902 and is a charter city, having had its charter granted by the State of California in 1952. The City operates under the Council‐Manager form of government and provides the following services: public safety (police, fire, and paramedic), public works, utilities (water, wastewater, and solid waste), community development, cultural and recreation services and administration and support services.

A. Reporting Entity

The accompanying basic financial statements present the financial activities of the City, which is the primary government presented, along with the financial activities of its component units, which are entities for which the City is financially accountable. Although they are separate legal entities, blended component units are in substance part of the City's operations and are reported as an integral part of the City's financial statements. The City's component units, which are described below, are all blended.

The Mountain View Shoreline Regional Park Community (Shoreline Community) ‐ is a separate government entity created for the purpose of developing approximately 1,550 acres of bayfront lands. The Shoreline Community’s governing board is the same as the City and the City’s management has operational responsibility for the Shoreline Community. Its financial activities have been blended in the accompanying financial statements in the Shoreline Regional Park Community Special Revenue Fund and the nonmajor debt service funds. Separate financial statements for the Shoreline Community are also included as a component of the City’s Annual Comprehensive Financial Report.

The City of Mountain View Capital Improvements Financing Authority (Financing Authority) ‐  is a separate government entity whose purpose is to assist with the financing or refinancing of certain public capital improvements within the City. The Financing Authority’s governing board is the same as the City, the Financing Authority provides services solely to the City, and a financial benefit/burden relationship exists between the City and the Financing Authority. Its financial activities have been blended in the accompanying financial statements in the nonmajor debt service funds. Separate financial statements for the Financing Authority are not required and therefore, not issued.

B. Basis of Presentation

The City’s basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities. These standards require that the financial statements described below be presented.

Government‐Wide Financial Statements

The Statement of Net Position and the Statement of Activities display information about the primary government (the City and its component units). These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business‐type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues and other nonexchange transactions. Business‐type activities are financed in whole or in part by fees charged to external parties.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

B. Basis of Presentation (Continued)

Government‐Wide Financial Statements (Continued)

The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business‐type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that arise from mandatory and voluntary nonexchange transactions with other governments, organizations, or individuals that are restricted for use in a particular program, and (c) grants and contributions of capital assets or resources that are restricted for capital purposes. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements

The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category ‐  governmental, proprietary, and fiduciary ‐  are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds.

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as contributions and investment income, result from nonexchange transactions or ancillary activities.

C. Major Funds

Major funds are defined as funds that have either assets combined with deferred outflow of resources, liabilities combined with deferred inflow of resources, revenues or expenditures/expenses equal to 10.0 percent of their fund‐type total and 5.0 percent of the grand total of governmental and enterprise funds. Major governmental and business‐type funds are identified and presented separately in the fund financial statements. All other funds, called nonmajor funds, are combined and reported in a single column, regardless of their fund‐type. The General Fund is always a major fund, and the City may select other funds it believes should be presented as major funds.

The City reports major governmental funds in the basic financial statements as follows:

General Fund ‐ This is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Shoreline Regional Park Community Fund (Special Revenue) ‐  This fund receives property tax revenues on properties within the Shoreline Community. The fund accounts for the revenues and expenditures of the Shoreline Community.

Housing Fund (Special Revenue) ‐  This fund accounts for fees paid by developers to provide for increasing and improving the supply of extremely low, very low, low, and moderate income housing (affordable housing).

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

C. Major Funds (Continued)

General Capital Projects Fund (Capital Projects) ‐  This fund accounts for all capital improvement projects activities not funded from proprietary funds.

Park Land Dedication Capital Projects Fund (Capital Projects) ‐ This fund accounts for revenues derived from fees on residential subdivisions used for park and recreation projects.

The City reports all of its enterprise funds as major funds in the accompanying financial statements:

Water Fund – This fund accounts for the revenues and expenses related to the operation, maintenance and capital outlay required to supply, distribute and meter water. The City has agreements with the San Francisco Public Utilities Commission and the Santa Clara Valley Water District for the supply of wholesale water.

Wastewater Fund – This fund accounts for the revenues and expenses related to the operation, maintenance and capital outlay required to provide wastewater services. The City has an agreement with the City of Palo Alto to purchase treatment capacity at the Palo Alto Regional Water Quality Control Plant (Treatment Plant).

Solid Waste Fund – This fund accounts for the revenues and expenses related to disposal services, recycling operations, other solid waste operations, capital outlay and certain costs related to maintenance of the closed landfill sites. Collection operations are provided by an outside private contractor. The City has an agreement with the Cities of Palo Alto and Sunnyvale for disposal transfer capacity at the Sunnyvale Materials and Recovery Transfer (SMaRT®) Station.

The City also reports the following fund types:

Internal Service funds – These funds account for equipment maintenance and replacement, workers’ compensation insurance, unemployment self‐insurance, liability self‐insurance, retirees’ health plan, and employee benefits plan, all of which are provided to other funds on a cost‐reimbursement basis.

Custodial funds – These funds are fiduciary funds used to report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private purpose trust funds. These include custodial balances and activities of the labor unions, flexible benefits, and Center for Performing Arts. The financial activities of these funds are excluded from the government‐wide financial statements, but are presented in separate fiduciary fund financial statements.

D. Basis of Accounting

The government‐wide, proprietary fund, and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

D. Basis of Accounting (Continued)

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues, except sales taxes, reported in the governmental funds to be available if the revenues are collected within sixty days after fiscal year end. A ninety‐day availability period is used for sales taxes in order to include the State of California (State) final distribution of sales taxes revenue for the fiscal year. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long‐term debt, claims and judgments, landfill containment costs and compensated absences, which are recognized as expenditures to the extent they have matured and are due and payable at year end. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds from long‐term debt issuance and leases financing are reported as other financing sources.

Non‐exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements and donations. On the accrual basis, revenues from property taxes are recognized in the fiscal year for which the taxes are levied. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.

Those revenues susceptible to accrual are property taxes, sales taxes, certain intergovernmental revenues, transient occupancy taxes, utility user taxes, earned grant entitlements, special assessments due within the current fiscal year and investment revenue. All other revenue items are considered to be measurable and available only when cash is received.

Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost ‐reimbursement grants, categorical block grants and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.

Certain indirect costs are included in program expenses reported for individual functions and activities.

As a general rule, the effect of interfund activity has been eliminated in the preparation of the government‐wide financial statements. Exceptions to this general rule are charges between the government’s business‐type activities and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Amounts reported as program revenues include 1) charges to customers or applicants for goods or services, 2) operating grants and contributions and 3) capital grants and contributions, including special assessments. Internally dedicated resources and taxes are reported as general revenues rather than as program revenues.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

D. Basis of Accounting

(Continued)

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds and internal service funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of connection fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.

E. Inventory

Inventories are valued at cost (first in, first out). Inventories of the General Fund consist of expendable supplies held for consumption. The cost is recorded as expenditures at the time individual inventory items are consumed. Inventories of the Shoreline Golf Links Nonmajor Special Revenue F und consist of merchandise held for resale to consumers. The cost is recorded as expenditures at the time individual inventory items are sold.

F. Property Taxes

The County of Santa Clara (County) assesses properties and it bills, collects, and distributes property taxes to the City. The County remits to the City the entire amount levied and handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are levied on July 1 for the fiscal year.

Secured property tax becomes a lien on January 1 and is due in two installments, on November 1 and February 1. It becomes delinquent after December 10 and April 10, respectively. Unsecured property tax bills are distributed in July and are due upon receipt, and become delinquent after August 31. Collection of delinquent accounts is the responsibility of the County, which retains all penalties.

The term “unsecured” refers to taxes on personal property other than real estate, land and buildings and are secured by liens on the property owner. Property tax revenues are recognized by the City in the fiscal year they are levied, provided they become available as defined above.

G. Compensated Absences

Compensated absences, representing earned but unused vacation, sick leave pay and related costs, are reported in the Statement of Net Position. All compensated absences and related costs are accrued when incurred in the government‐wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental funds only if they become due and payable. The City uses the vesting method for the calculation of compensated absences.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

H. Deferred Outflows and Inflows of Resources

In addition to assets, the Statement of Net Position and Balance Sheets report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

In addition to liabilities, the Statement of Net Position and Balance Sheets report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

I. Pension and Other Postemployment Benefits (OPEB) Items

For purposes of measuring the net pension liability and net OPEB liability, deferred outflows/inflows of resources related to pension and OPEB, pension and OPEB expenses, information about the fiduciary net position of the City’s Pension and OPEB plans, and additions to/deductions from the plans’ fiduciary net positions have been determined on the same basis as they are reported by the California Public Employees’ Retirement System (CalPERS) and the California Employer’s Retiree Benefit Trust (CERBT) Fund Program, respectively. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. CalPERS plan member contributions are recognized in the period in which the contributions are due. Investments are reported at fair value. The governmental activities’ share of net pension liability and net OPEB liability are typically liquidated by the General Fund.

J. Effects of New GASB Pronouncements

The City adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statements in Fiscal Year 2023‐24:

1. In April 2022, the GASB issued Statement No. 99, Omnibus 2022. The objectives of this statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (a) practice issues that been identified during implementation and application of certain GASB Statements and (b) accounting and financial reporting for financial guarantees. Implementation of these requirements did not have a significant impact on the City’s financial statements for the fiscal year ended June 30, 2024.

2. In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections – An Amendment of GASB Statement No. 62. The primary objective of this statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant consistent, and comparable information for making decisions or assessing accountability. The requirements of this statement did not have a significant impact on the City's financial statements for the fiscal year ended June 30, 2024.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

J. Effects of New GASB Pronouncements (Continued)

The City is currently analyzing its accounting practices to identify the potential impact on the financial statements for the GASB statements as follows:

1. In June 2022, the GASB issued Statement No. 101, Compensated Absences. The objective of this statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The requirements of this statement are going to be effective for the City’s fiscal year ending June 30, 2025.

2. In December 2023, the GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. The requirements of this statement are going to be effective for the City’s fiscal year ending June 30, 2025.

3. In April 2024, the GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. The requirements of this statement are going to be effective for the City’s fiscal year ending June 30, 2026.

K. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

NOTE 2 BUDGETS AND BUDGETARY ACCOUNTING

A. Budgets and Budgetary Accounting

The City adopts an annual budget on or before June 30 for the ensuing fiscal year for the General Fund and all Special Revenue Funds except for the Deferred Assessments Fund.

No annual budgets are adopted for the Debt Service Funds. Repayment of the debt is authorized by the adoption of the indenture provisions for the life of the debt.

The Storm Drain Construction and Park Land Dedication Capital Projects Funds are budgeted annually. All other Capital Projects Funds are budgeted on a project basis. Such budgets are based on a project time frame, rather than a fiscal year operating time frame, whereby unused appropriations continue until project completion.

Budget appropriations become effective on each July 1. The City Council may amend the budget during the fiscal year. The legal level of budgetary control has been established at the fund and department level. Appropriations lapse at the end of the fiscal year to the extent they have not been expended or encumbered.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 2 BUDGETS AND BUDGETARY ACCOUNTING (Continued)

A.

Budgets and Budgetary Accounting (Continued)

All Governmental Fund Type annual budgets are presented on a basis consistent with the basic financial statements prepared in accordance with GAAP.

Budgeted revenue amounts represent the original budget modified by adjustments authorized during the fiscal year. Budgeted expenditure amounts represent original appropriations adjusted for supplemental appropriations during the fiscal year and reappropriated amounts for encumbrances, grants, and donations outstanding at the end of each prior fiscal year.

The City Council must approve appropriation increases to departmental budgets; however, management may transfer Council‐approved budgeted amounts within fund and departmental expenditure classifications. Judgments, settlements and certain accrual entries are not subject to budgetary control and expenditures exceeding budget due to these items do not constitute a violation of budget policy or control. Supplemental appropriations were approved during the course of the fiscal year as needed.

B. Encumbrance Accounting

Under encumbrance accounting, purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary integration. Encumbrances outstanding at fiscal year‐end are automatically reappropriated for inclusion in the following fiscal year’s budget.

NOTE 3 CASH AND INVESTMENTS

The City pools cash from all sources and all funds, except restricted cash and investments, so the pool of funds can be invested consistent with goals for safety and liquidity, while maximizing yield. Cash is pooled so individual funds can make expenditures at any time.

A. Policies

For custodial credit risk, California law requires banks and savings and loan institutions to pledge government securities with a fair value of 110.0 percent of the City’s cash on deposit, or first trust deed mortgage notes with a fair value of 150.0 percent of the deposit, as collateral for these deposits. Under California law, this collateral is held in a separate investment pool by another institution in the City’s name and places the City ahead of general creditors of the institution.

The City invests in individual investments and in investment pools. Individual investments are evidenced by specific identifiable securities instruments, or by an electronic entry registering the owner in the records of the institution issuing the security, called the book entry system. In order to increase security, the City employs the trust department of a bank as the custodian of certain City managed investments, regardless of their form.

The City’s investments are carried at fair value. The carrying value of these investments are periodically adjusted to reflect their fair value at each fiscal year end and the effects of these adjustments are included as income or expense for that fiscal year.

Investment income is allocated among funds on the basis of average daily cash and investment balances in each fund, unless there are specific legal or contractual requirements to do otherwise.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 3 CASH AND INVESTMENTS (Continued)

A. Policies (Continued)

Cash and investments with an original maturity of three months or less are considered to be cash equivalents in the proprietary fund statements of cash flows because these assets are highly liquid and are expended to liquidate liabilities arising during the fiscal year.

B. Classification

Cash and investments are classified in the financial statements based on whether or not their use is restricted under the terms of debt instruments. Investments are carried at fair value as of June 30, 2024. Cash and investments are as follows (dollars in thousands):

Cash and investments as of June 30, 2024, consist of the following (dollars in thousands):

C. Investments Authorized by the California Government Code and the City’s Investment Policy

The California Government Code and the City’s Investment Policy authorize the investment types in the following table, provided the credit ratings of the issuers are acceptable to the City; and approved percentages and maximum maturities are not exceeded. The table also identifies certain provisions of the California Government Code, or the City’s Investment Policy where the City’s Investment Policy is more restrictive, that addresses interest rate risk, credit risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s Investment Policy.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 3 CASH AND INVESTMENTS (Continued)

C. Investments Authorized by the California Government Code and the City’s Investment Policy (continued)

The City’s Investment Policy and the California Government Code allow the City to invest in the following:

by the City or any of its

(A) The policy requires a minimum of 25 percent of the total portfolio to be invested in U.S. Treasury Obligations. The policy does not specify a maximum for this type of investment.

(B) The policy allows only municipal bonds issued by the City of Mountain View or its component units at limits and maturities as approved by the City Council.

D. Investments Authorized by Debt Agreements

The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as

to be used if the City fails to meet its obligations under these debt issues. The investment of debt

held by bond trustee is governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s Investment Policy. These debt agreements do not address interest rate, credit, and concentration of credit risks.

City of Mountain View

For the Year Ended June 30, 2024

NOTE 3 CASH AND INVESTMENTS (Continued)

D. Investments Authorized by Debt Agreements (Continued)

The investment types that are authorized for investments held by bond trustee are as follows:

Authorized Investment Type

U.S. Treasury Obligations

U.S. Agency Securities

Deposit Accounts, Federal Funds and Banker's

Acceptances

FDIC Insured Certificates of Deposit

Commercial Paper

Money Market Mutual Funds

State and Local Agency Bonds

Insurer Approved Investment Contracts

Insurer Approved Other Forms of Investments Including Repurchase Agreements

Local Agency Investment Fund (LA IF)

Joint Power Authority (JPA) Investment Pools

Certificate of deposit

E. Interest Rate Risk

Maximum

Maturity

No Limit

No Limit

180 days

No Limit

180 days

No Limit

No Limit

No Limit

No Limit

No Limit

No Limit

2 years

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. The City monitors the interest rate risk inherent in its portfolio by measuring the modified duration (modified duration is a measure of a fixed income’s cash flows using present values, weighted for cash flows as a percentage of the investments’ full price) of its portfolio. The City monitors interest rate risk inherent in investments held by the trustee by using specific identification.

For the Year Ended June 30, 2024

NOTE 3 CASH AND INVESTMENTS (Continued)

E. Interest Rate Risk (Continued)

The City’s interest rate risk by investment type and fair value is as follows (dollars in thousands):

Held by the City:

TypeAmount(in years)

3.09 Municipal Bonds ‐ Shoreline Regional Park Community 2018

Bonds 2,3124.47 Money Market Mutual Funds

Held by Bond Trustee: Money Market Mutual Funds

N/A

N/A Total Investments 1,089,525 $

Through the City’s Investments Policy, the City manages its exposure to fair value losses arising from increasing interest rates by limiting the modified duration of its investment portfolio to within 15.0 percent of the modified duration of a benchmark portfolio as defined in the Investment Policy. As of June 30, 2024, the allowed modified duration ranged from 1.62 to 2.19 years and the actual is within this range.

Investments in municipal bonds shown above represent the City’s investment in the Shoreline Regional Park Community 2018 Revenue Bonds. The balance as of June 30, 2024, is stated at amortized cost, which approximates fair value.

The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State. The City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance available for withdrawal is based on the accounting records maintained by the State, which are recorded on an amortized cost basis. LAIF is part of the State’s Pooled Money Investment Account (PMIA). The total balance of the PMIA is approximately $178.0 billion as of June 30, 2024. Of that amount, 97.16 percent was invested in nonderivative financial products and 2.84 percent in structured notes and asset backed securities. As of June 30, 2024, LAIF had an average maturity of 217 days.

Mutual Money Market Funds investments are available for withdrawal on demand and as of June 30, 2024, have an average maturity of less than 60 days. Fair ValueModified Duration

For the Year Ended June 30, 2024

NOTE 3 CASH AND INVESTMENTS (Continued)

F. Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City’s Investment Policy is to apply the prudent investor’s standard in managing the overall portfolio. The standard states that investments shall not be made for speculation but shall be made with judgment and care, which investors of prudence, discretion and intelligence exercise considering the safety of principal, liquidity, and return on investment in this priority order. As of June 30, 2024, the City’s investment in money market mutual funds, and supranational securities are rated AAA by Standard & Poor’s. U.S. agency securities are rated AA by Standard & Poor’s. The medium‐term notes are rated between A and AA by Standard & Poor’s. The U.S. Treasury obligations are exempt from credit rating disclosure. The Municipal Bonds ‐  Shoreline Regional Park Community 2018 Revenue Bonds are rated A+ by Standard & Poor’s. The Local Agency Investment Fund was not rated as of June 30, 2024.

G. Concentration of Credit Risk

The City’s Investment Policy regarding the amount that can be invested in any one issuer is stipulated by the California Government Code. However, the City is required to disclose investments that represent a concentration of 5.0 percent or more of investments in any one issuer other than U.S. Treasury obligations, money market mutual funds and external investment pools. As of June 30, 2024, those investments held by the City consisted of the following (dollars in thousands):

H. Fair Value Hierarchy

The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. As of June 30, 2024, All of the City’s investments are measured using level 2 inputs, except for investments in LAIF and money market mutual funds, which are not subject to the fair value hierarchy. Investments measured using level 2 inputs are valued using prices determined by the use of matrix pricing techniques maintained by the pricing vendors for these investments. Matrix pricing is used to value investments based on the investments’ relationship to benchmark quoted prices.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 4 LOANS AND NOTES RECEIVABLE

As of June 30, 2024, the City’s loans and notes receivable are as follows (dollars in thousands):

CDBG Rehabilitation95 $

Mid‐ Peninsula Support network 55

Ginzton Terrace 715

Project Match 132

Central Park Apartments

Sierra Vista Apartments Affordance Housing 238

Stoney Pine Charities 124

HomeSafe 100

San Antonio Place LP

Tyrella Gardens

Bill Wilson Center 133

San Veron Park

SR Fountains LP

Franklin Street Family Apartments

El Camino West Affordable Studios

Rengstorff Affordable Housing

Palo Alto Housing

East Evelyn Affordable Housing

North Shoreline Housing

950 W El Camino Real (PAH)

MV Lot 12 Housing Partners

1100 La Avenida

Montecito LP 5,007

901 E El Camino Real

Employee homebuyer Program

Housing Trust Silicon Valley ‐ Google

Total

$

The City engages in programs designed to encourage construction or improvement of housing for persons with extremely low to moderate income or other such projects. Under these programs, grants or loans are provided under favorable terms to homeowners or developers who agree to spend these funds in accordance with the City’s terms. The City does not expect to collect these loans in the near term, and most of the loan terms are deferred to the future. Any proceeds collected are restricted by grant requirements and thus these balances have been offset by a restriction of fund balance in the fund financial statements. Due to the nature of the repayment structures of the City’s housing loans, the City is not accruing interest on these loans. Interest revenue is recognized upon receipt.

These loan programs are funded by Community Development Block Grants (CDBG) funds, Home Investment Partnership Act (HOME) grant funds, Housing Fund, General Fund, and former Mountain View Revitalization Authority (Authority). With the dissolution of the Authority effective January 31, 2012, the City became the Housing Successor Agency. The balances of the loans were transferred to the Housing Successor Special Revenue Fund (Housing Successor) of the City.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 4 LOANS AND NOTES RECEIVABLE (Continued)

A. CDBG Rehabilitation

The City administers a housing rehabilitation loan program initially funded with CDBG funds. Under this program, individuals with incomes below a stated level are eligible to receive low‐interest loans for rehabilitation work on their home. These loans are secured by deeds of trust, which may be subordinated with the prior written consent of the City. The loan repayments may be amortized over the life of the loans, deferred to maturity or combination of both. There are three such loans outstanding totaling $95,000 as of June 30, 2024.

B. Mid‐Peninsula Support Network

On December 23, 1980, the City loaned $55,000 to Mid‐Peninsula Support Network for the acquisition and rehabilitation of a residential structure for the purpose of providing temporary shelter for battered parents and their children. The loan was funded by CDBG funds and becomes payable upon demand by the City upon failure to comply with the terms of the loan agreement. The loan carries a 12.0 percent annual interest rate and shall accrue beginning 30 days following the date of demand. The loan is collateralized by a first deed of trust. As of June 30, 2024, the amount of the loan outstanding is $55,000.

C. Ginzton Terrace

On December 11, 1991, the City loaned $380,000 to the Mid‐Peninsula Housing Coalition (Coalition) for predevelopment and land acquisition costs related to the development of a 107‐  unit affordable senior housing complex located at 375 Oaktree Drive. On May 1, 1993, the City amended the loan agreement and loaned the Coalition an additional $215,000 for the purpose of paying park and recreation fees required prior to occupancy of the land. On February 12, 1996, excess funds not used were returned to the City in the amount of $78,000. The loan balance of $517,000 was funded by CDBG funds.

On May 21, 2013, the City approved another modification to extend the loan term to May 31, 2038, reducing the annual simple interest rate from 6.0 percent to 3.0 percent effective June 1, 2013, and restructured the repayment to be based on 50.0 percent of the residual receipts. The loan balance and accrued interest will become payable on May 31, 2038.

On April 21, 2015, the City awarded $340,000 in CDBG funds and $185,000 in HOME funds for rehabilitation activities. The CDBG and HOME loans are to be repaid by January 31, 2066 and January 31, 2071, respectively, with zero percent interest.

As of June 30, 2024, the total outstanding amount of all loans related to Ginzton Terrace is $715,000.

D. Project Match

On May 1, 1997, the City loaned $132,000 to Project Match for the acquisition of the house located at 1675 South Wolfe Road, Sunnyvale, to provide affordable housing for low‐income seniors. The loan was funded by HOME grant funds. The loan is to be repaid over a 30‐year period at 3.0 percent annual simple interest. Interest and principal amounts are deferred. The loan is collateralized by a second deed of trust. As of June 30, 2024, the amount of the loan outstanding is $132,000.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 4 LOANS AND NOTES RECEIVABLE (Continued)

E. Central Park Apartments

On July 1, 1998, the City and Housing Successor funds loaned $2.2 million to the Coalition for the acquisition and rehabilitation of a 149‐unit apartment complex known as Central Park Apartments at 90 Sierra Vista Avenue to be used to provide housing for very‐low‐  to low income seniors. The entire project was initially funded by three loans: $388,000 from Housing set aside funds to be repaid over nine years, commencing in Fiscal Year 1998‐99 and bearing 3.0 percent annual interest; $1.2 million of CDBG funds to be repaid over 36 years commencing in Fiscal Year 2012‐13 and bearing 3.0 percent annual interest; and $612,000 from HOME grant funds to be repaid over 21 years commencing in Fiscal Year 2004‐05 and bearing 3.0 percent annual interest.

On August 19, 2004, the City loaned $498,000 to the Coalition for the rehabilitation of the Central Park Apartments. The loan was funded by CDBG funds to be repaid over 16 years commencing in Fiscal Year 2017‐18 and bearing 1.2 percent annual interest.

On April 17, 2006, the City approved a $748,000 loan to the Coalition for the construction of the New Central Park Apartments. The loan was funded by CDBG funds with zero percent interest and repayment is deferred until January 1, 2054, or upon the repayment of the $1.3 million HOME loans described below.

On June 1, 2007, the City approved a loan of $1.3 million to fund the development cost of 104 apartments. The loan was funded by HOME grant funds with zero percent interest and repayment is deferred until the later of January 1, 2041, or upon repayment of the $851,000 Housing Successor’s loan. As of June 30, 2024, the outstanding HOME loan balance is fully paid.

On July 24, 2007, the City approved a $405,000 loan to the Coalition for the development of the New Central Park Apartments. The loan was funded by CDBG funds with zero percent interest and final payment is deferred until July 1, 2063. As of June 30, 2024, the amount of this CDBG loan is $367,000

On April 23, 2013, the City approved an additional loan of $275,000 from CDBG funds to the Coalition. The loan was used to upgrade the utilities and install energy‐efficient hot water heaters in the original 149‐unit apartment complex. The loan bears annual interest at 1.5 percent, with repayment deferred until calendar year 2034 or upon repayment of the $498,000 CDBG loan.

As of June 30, 2024, the total outstanding balance of all loans related to Central Park apartments is $2.7 million.

F. Sierra Vista Apartment Affordable Housing

On February 1, 1999, the City approved to loan up to $100,000 to Sierra Vista I Limited Partnership/Charities Housing Corporation for the development and renovation of a 34‐unit affordable apartment complex to low and moderate income families to be located at 1909 Hackett Avenue. An additional loan in the amount of $255,000 was approved on January 16, 2007. The loans were funded by CDBG funds with 6.0 percent interest and a term of September 2019 and January 2032, respectively.

On September 24, 2013, the City approved an amendment to the loan agreements with Charities Housing Corporation. This CDBG loan funding will bear interest at 3.3 percent, compound annually on September 1. The term of the loan will be 57 years, maturing on October 1, 2070. As of June 30, 2024, the amount of the loans outstanding is $238,000.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 4 LOANS AND NOTES RECEIVABLE (Continued)

G. Stoney Pine Charities

On August 16, 2000, the City loaned $124,000 to the Stoney Pine Charities Housing Corporation for the construction of a 23‐unit apartment complex at 212 North Mathilda Avenue and 271‐283 West California Avenue, Sunnyvale, to provide affordable housing for very low income persons with developmental disabilities. The loan was funded by $9,000 of CDBG funds and $115,000 of HOME grant funds. The loans bear simple interest at 3.0 percent, but repayment of interest and principal is deferred for 40 years. The loans and accumulated interest remain deferred unless during the term of the loan, or after 40 years, the apartments no longer meet the affordability test for very low‐income persons with developmental disabilities, or if the property is sold or transferred. The loan is collateralized by a second deed of trust. As of June 30, 2024, the amount of the loan outstanding is $124,000.

H. HomeSafe

On February 21, 2001, the City loaned $100,000 to the HomeSafe Santa Clara L.P. for the construction of a 25‐unit apartment complex at 611 El Camino Real, Santa Clara, to provide affordable housing for women and children who are victims of domestic violence. The loan was funded by $100,000 of HOME grant funds. The loan bears simple interest at 3.0 percent, but repayment of interest and principal is deferred for 55 years unless during the term of the loan, the apartments no longer meet the affordability test for very low to low‐income victims of domestic violence, or if the property is sold or transferred. The loan is collateralized by a first deed of trust. As of June 30, 2024, the amount of the loan outstanding is $100,000.

I. San Antonio Place LP (Charities Housing Development Corporation)

On April 25, 2002, the City approved an agreement to loan up to $5.3 million to Charities Housing Development Corporation (Corporation) for development of an efficiency studios housing project to provide affordable housing for very‐low to low‐income persons. On July 1, 2004, the Corporation assigned to the San Antonio Place LP all of the rights and obligations under the agreements. The loan amount was amended to loan up to $5.5 million on December 1, 2006, which would be funded by $2.5 million of CDBG funds, $2.2 million of HOME grant funds and $809,000 of the Housing Successor funds. The loan is provided at zero percent interest with repayment deferred for 55 years unless the San Antonio Place LP no longer meets the terms and conditions of the agreement. As of June 30, 2024, the amount of the loan outstanding is $5.5 million.

J. Tyrella Gardens

On May 20, 2003, the City approved to loan up to $390,000 to MP Tyrella Associates for the development and renovation of an affordable apartment complex to low and moderate income families to be located at 449 Tyrella Avenue. The loan was funded by CDBG funds with 3.0 percent interest and a term of 55 years.

On April 22, 2014, the City awarded MP Tyrella Associates additional loans of $172,000 from CDBG funds and $653,000 from HOME funds to rehabilitate 56 existing rental units. The loan agreement for CDBG funds was executed on July 1, 2015, with 3.0 percent simple interest and is due in 50 years. The loan agreement from HOME funds was executed on July 1, 2015, with 3.0 percent simple interest and is due in 43 years.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 4 LOANS AND NOTES RECEIVABLE (Continued)

J. Tyrella Gardens (Continued)

On August 1, 2022, the City entered into an amended and restated secured promissory note agreement with MP Tyrella Associates and the loan funded by CDBG funds and HOME funds were amended to $819,000 and $771,000, respectively. The loan has a 3.0 percent interest and a term of 55 years. As of June 30, 2024, the total outstanding balance of all loans related to Tyrella Gardens is $1.6 million.

K. Bill Wilson Center

On December 5, 2008, the City loaned $133,000 to The Bill Wilson Center, a nonprofit corporation, for the acquisition and operation of a youth and counseling services shelter. The loan was funded by CDBG funds and is due in 30 years and has a term of 3.0 percent simple interest. As of June 30, 2024, the amount of the loan outstanding is $133,000.

L. San Veron Park

On December 1, 2009, the City amended an agreement with San Veron Corporation to loan up to $898,000 to renovate one hundred twenty‐four affordable Town home units for very‐low and low‐  income households. The loan was funded by HOME grant funds, however, the construction did not occur until Fiscal Year 2012‐13. On July 1, 2013, the City approved and authorized the provision of increasing the loan amount to $1.1 million, and to be drawn from the HOME grant funds. As of June 30, 2024, the amount of the loan outstanding is $484,000.

M. SR Fountains LP

On December 1, 2009, the City approved to loan up to $255,000 to SR Fountains Limited Partnership for the rehabilitation of 124 existing units at The Fountains Apartments property located at 2005 San Ramon Avenue. The loan was funded by HOME grant funds with zero percent interest and repayment is deferred until December 1, 2019. In 2010 and 2012, the City approved an additional $466,000 and $305,000, respectively, loan to SR Fountains Limited Partnership.

On April 19, 2016, the City authorized an additional $675,000 loan from CDBG funds. This loan bears no interest and repayment is deferred until December 31, 2026. Subsequently on May 2, 2017, the City awarded an additional $450,000 in CDBG funding, increasing this deferred loan to a total of $1.1 million. An amendment to the loan agreement was entered on June 1, 2018, with no changes to the key loan terms.

As of June 30, 2024, the total outstanding balance of all loans related to SR Fountains LP is $1.1 million.

N. Franklin Street Family Apartments

On April 18, 2011, the City approved an agreement to loan up to $1.3 million to ROEM Development Corporation (ROEM) to acquire a long‐term ground lease of property known as 135 Franklin Street. The loan was funded by CDBG funds at 4.0 percent interest and a term of 55 years.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 4 LOANS AND NOTES RECEIVABLE (Continued)

N. Franklin Street Family Apartments (Continued)

On April 18, 2011, the City approved an agreement to loan up to $10.6 million to ROEM for the development of an affordable family rental housing development to be located at the property mentioned above. The loan was funded by Housing Successor funds with 4.0 percent interest and a term of 55 years.

On April 18, 2011, the City approved an agreement to loan up to $646,000 from the Housing fund to ROEM for the same project mentioned above. The loan was funded with 4.0 percent interest and a term of 55 years.

On November 1, 2011, the full loan was assigned to Franklin Street Family Apartments. As of June 30, 2024, the total outstanding balance of all loans related to Franklin Street Family Apartments is $12.5 million.

O. El Camino West Affordable Studios

On January 22, 2013, the City approved an agreement to loan up to $3.5 million to First Community Housing to acquire 0.48 acre of property located at 1581‐1585 El Camino Real West. The loan was funded by HOME grant funds and Housing funds for the amounts of $920,000 and $2.5 million, respectively. The term of the loan is 3.0 percent interest for 55 years. As of June 30, 2024, the amount of the loan outstanding is $3.5 million.

P. Rengstorff Affordable Housing

On June 3, 2013, the City approved an agreement to loan up to $9.0 million to ROEM for the development of an affordable family rental housing development to be located at 819 North Rengstorff Avenue. The loan was funded by Housing funds with 3.0 percent interest and a term of 55 years. As of June 30, 2024, the amount of the loan outstanding is $8.2 million.

Q. Palo Alto Housing

On December 20, 2015, the City entered into a predevelopment funding agreement with Palo Alto Housing Corporation for predevelopment activities at 1701 West El Camino Real. This prefunding loan of $1.0 million was funded from Housing funds. On April 3, 2017, the City entered into a permanent loan agreement with 1701 ECR, LP where the outstanding principal balance of the predevelopment loan was rolled over into the permanent loan. The approved total amount of loan funded by Housing funds for this housing development was $8.0 million, with 3.0 percent simple interest rate commencing upon City’s issuance of a final certificate of occupancy. As of June 30, 2024, the amount of the loan outstanding is $8.0 million.

R.East Evelyn Affordable Housing

On May 31, 2016, the City entered into a loan agreement with Evelyn Avenue Family Apartments, LP for an affordable housing development at 779 East Evelyn Avenue. The total loan amount is $21.7 million and was funded by Housing funds. The loan has a 55‐year term with 3.0 percent simple interest rate. As of June 30, 2024, the amount of the loan outstanding is $21.7 million.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 4 LOANS AND NOTES RECEIVABLE (Continued)

S. North Shoreline Housing

On April 1, 2019, the City entered into an agreement to loan up to $8.2 million to MP Shorebreeze Associates, L.P. for the development of an affordable multi‐family residential rental development to be located at 460 North Shoreline Boulevard. The $8.2 million loan was funded by HOME grant funds, CDBG grants funds, and Housing funds for the amounts of $421,000, $96,000, and $7.6 million, respectively. The term of the loan is 3.0 percent interest for 55 years. As of June 30, 2024, the amount of the loan outstanding is $8.2 million.

T. El Camino Real

On June 1, 2020, the City entered into a loan agreement with 950 El Camino Real, L.P. (950 ECR) for an affordable housing development at 950 West El Camino Real. The total loan amount is $22.8 million and was funded by Housing funds. The loan has a 55‐year term with 3.0 percent simple interest rate.

During the year ended June 30, 2020, 950 ECR entered into a loan agreement with a third party. The City’s loan is subordinate to the third‐party loan. 950 ECR, the third party, and the City entered into a subordination agreement in which the City is required to holdback loan proceed of $4.7 million and deposit into a segregated bank account. During Fiscal Year 2022‐23, the holdback loans proceed was disbursed to 950 ECR. As of June 30, 2024, the amount of the loan outstanding is $22.8 million.

U. Housing Trust Silicon Valley

On May 26, 2022, the City entered into an assignment and assumption agreement with Google LLC and accepted the assignment of a promissory note of $5.0 million with Housing Trust Silicon Valley. Google LLC assigned the promissory note to the City as payment for the housing impact fees related to its development projects. The note has a final maturity date of January 31, 2025, with 1.5 percent interest rate payable semi‐annually. As of June 30, 2024, the amount of the loan outstanding is $5.0 million.

V. MV Lot 12 Housing Partners

On March 2, 2023, the City entered into a predevelopment loan agreement of $1.3 million with MV Lot 12 Housing Partners, L.P. for funding of predevelopment activities on a 1.5‐acre real property bounded by California, Bryant, and Mercy Streets. The loan was funded by Housing funds, and the term of the loan is 3.0 percent simple interest and matures on the earlier of i) March 2, 2026, and ii) the date of closing for any construction/permanent loan provided by the City. As of June 30, 2024, the amount of the loan outstanding is $1.0 million.

W. La Avenida

On December 8, 2020, the City Council approved a prefunding of $1.3 million from Housing funds for use in predevelopment activities related to affordable housing developments at 1188 Armand Drive. The City entered into an affordable housing loan agreement, effective as of December 1, 2022, with Avenida Armand, L.P. to provide construction/permanent loan to the developer in the amount of $15.0 million. The term of the loan is 3.0 percent interest for 55 years. As of June 30, 2024, the amount of the loan outstanding is $14.7 million.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 4 LOANS AND NOTES RECEIVABLE (Continued)

X. Montecito L.P.

On June 22, 2021, the City Council approved a prefunding of $1.3 million from Housing funds for use in predevelopment activities related to affordable housing developments at 1265 Montecito Ave. The City executed a predevelopment loan agreement on July 1, 2022 with Montecito, L.P. The term of the loan is no interest and matures on the earlier of i) December 31, 2024, and ii) the date of closing for any construction/permanent loan provided by the City. As of June 30, 2024, the amount of the loan outstanding is $5.0 million.

Y. Employee Homebuyer Program

The City has an Employee Homebuyer Program to provide home buying and relocation assistance to eligible City employees. The program was funded by General Fund and the notes have terms of thirty years and interest based on applicable federal rate. Payment is deducted from the employee’s biweekly paycheck. As of June 30, 2024, there is one employee loan and the outstanding balance is $2.0 million.

Z. 901 E El Camino Real

In January 2021, the City Council voted to work with the County of Santa Clara to facilitate the acquisition and rehabilitation of the Crestview Hotel, located at 901 East El Camino Real, to meet various housing needs. Since then, the City Council has approved to loan up to $9.1 million to Jamboree Housing Corporation for this affordable housing project. This loan is to be funded by HOME grant funds, CDBG grants funds, Housing funds, and federal grants for the amounts of $3.6 million, $3.8 million, $878,000, and $750,000, respectively. The term of the loan is 3.0 percent interest for 55 years. As of June 30, 2024, the amount of the loan outstanding is $6.3 million.

NOTE 5 INTERFUND TRANSACTIONS

A. Current Interfund Balances

Current interfund balances arise in the normal course of business and are expected to be repaid shortly after the end of the fiscal year. As of June 30, 2024, there is no outstanding interfund balances.

B. Interfund Advances

Advances are not expected to be repaid within the next fiscal year. As part of the City’s capital projects budgeting and funding process, resources from enterprise funds are advanced to the General Capital Projects Fund where the project costs are budgeted for and incurred. These advances are reduced as funds are expended on enterprise fund projects. Any unspent advances will be repaid to the enterprise fund upon the completion of the projects. As of June 30, 2024, the General Capital Projects Fund has outstanding advances of $30.1 million, $19.2 million, and $711,000 from the Water, Wastewater, and Solid Waste enterprise funds, respectively.

C.

Internal Balances

Internal balances are presented only in the government‐wide financial statements. They represent the net receivables and payables remaining after the elimination of all such balances within governmental and business‐type activities.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

D. Transfers Between Funds

With Council approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to allocate resources from the fund that receives them to the fund where they will be spent without a requirement for repayment. Less often, a transfer may be made to open or close a fund.

Transfers between funds during the fiscal year ended June 30, 2024, are as follows (dollars in thousands):

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 5 INTERFUND TRANSACTIONS (Continued)

D. Transfers Between Funds (Continued)

The purposes for these transfers are as follows:

A. To fund debt service payments.

B. To transfer remaining balances on completed capital improvement projects, interest back to original funding source, and other funds.

C. Recurring transfers for capital, operating costs, or equipment replacement.

NOTE 6 CAPITAL ASSETS

All capital assets, including intangible assets, are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are valued at their acquisition value. The City defines capital assets as assets with an initial individual cost of more than $100,000 for land and infrastructure, $25,000 for buildings and improvements other than buildings, and $5,000 for others, and an estimated useful life in excess of two years.

Depreciation is provided using the straight‐line method, which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each fiscal year until the asset is fully depreciated. The City has assigned the useful lives to capital assets as follows:

Buildings

Improvements other than buildings

Machinery and equipment

25 to 50 years

5 to 50 years

3 to 20 years Traffic

years

Sidewalks, curbs, and gutters 40 years Streets and roads 40 years

Major outlays for capital assets and improvements are capitalized as projects are constructed.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

A. Capital Asset Activities

Capital assets activity for the fiscal year ended June 30, 2024, is as follows (dollars in thousands):

City of Mountain View

to Basic Financial Statements

For the Year Ended June 30, 2024

A. Capital Asset Activities (Continued)

B. Depreciation Allocation

Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each function for the fiscal year ended June 30, 2024, are as

(dollars in thousands):

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 6 CAPITAL ASSETS (Continued)

C. Construction Commitments

The City has active construction projects that include land; improvements other than buildings; buildings; infrastructure; and water, wastewater, and solid waste improvements. Commitments for construction, as of June 30, 2024, are as follows (dollars in thousands):

Spent Remaining to DateCommitment

Governmental activities:

Business‐ type activities:

Commitments are funded from 1) revenues received directly by the capital projects fund and 2) general fund, special revenue fund and enterprise fund revenues transferred to the capital projects fund.

D. Joint Use Open Space and Recreational Facilities at a Future School Site

The Los Altos School District (LASD) intended to acquire an approximately 11.65‐acre site (Property) within the City for the construction of a new school facility. Of the total site, 9.65‐acre of the property (School Site) will be retained by LASD to develop as a school site and for joint use recreational purposes with the City. The remaining 2.0‐acre open space (Open Space Park) is planned to be developed into a community park and recreational facilities. On December 11, 2018, the City Council authorized a contribution of $43.0 million toward the site acquisition, of which $23.0 million is for the School Site and $20.0 million is for the Open Space Park.

On July 16, 2019, the City executed a funding and joint use agreement with LASD outlining the City’s involvement in the development of the School Site and the opportunities for use of certain joint use recreational facilities during non‐school days and non‐school hours serving the community. During the year ended June 30, 2020, LASD acquired the Property and the City contributed $23.0 million to LASD.

On November 19, 2019, the City entered into a property transfer agreement where LASD agrees to transfer the title of the Open Space Park to the City upon the acquisition of the Property and the completion of pre‐transfer due diligence activities. As of June 30, 2024, pre‐transfer due diligence activities were not completed and the $20.0 million payment made by the City for the Open Space Park was reported as deposits and prepaid items.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 7 NONCURRENT LIABILITIES

The City generally incurs long‐term debt to finance projects or purchase assets, which will have useful lives equal to or greater than the related debt. The City’s debt issues and other liability transactions are summarized below and discussed in detail thereafter.

A. Composition and Changes

Noncurrent liabilities activities for the fiscal year ended June 30, 2024, are as follows (dollars in thousands):

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 7 NONCURRENT LIABILITIES (Continued)

B. Descriptions of Noncurrent Liabilities

2018 Revenue Bonds Shoreline Regional Park Community ‐  On December 19, 2018, the Shoreline Community issued 2018 Revenue Bonds, Series A (Tax‐Exempt) and Series B (Taxable) (2018 Bonds) of $53.5 million and $10.3 million, respectively. Proceeds from the 2018 Bonds were used to provide funds to acquire and construct certain capital improvements of benefit to the Shoreline Community. The 2018 Bonds are special obligations of the Shoreline Community and are secured by a portion of all taxes levied upon all taxable property within the Shoreline Community. Principal payments are payable annually on August 1 and interest payments semiannually on August 1 and February 1 from property tax revenues generated within the Shoreline Community. The Shoreline Community is considered to be in default if the Shoreline Community fails to pay the principal of and interest on the outstanding bonds when they become due and payable. If an event of default has occurred and is continuing, the trustee may, and if requested in writing by the owners of a majority in aggregate principal amount of the bonds then outstanding, declare the accreted value and principal of the bonds, together with the accrued interest, to be due and payable immediately.

2022

Refunding Revenue

Bonds Shoreline Regional Park Community

‐  On November 22, 2022, the Shoreline Community issued the 2022 Bonds of $21.6 million through private placement. Proceeds from the 2022 Bonds were used to fully refund the outstanding 2011 Bonds of $21,100,000. The 2022 Bonds are special obligations of the Shoreline Community and are secured by a portion of all taxes levied upon all taxable property within the Shoreline Community. Principal payments are payable annually on August 1 and interest payments semi‐annually on August 1 and February 1 from property tax revenues generated within the Shoreline Community. The refunding resulted in net present value savings of $1.1 million. The Shoreline Community is considered to be in default if the Shoreline Community fails to pay the principal of and interest on the outstanding bonds when they become due and payable. If an event of default has occurred and is continuing, the trustee may, and if requested in writing by the owners of a majority in aggregate principal amount of the bonds then outstanding, declare the accreted value and principal of the bonds, together with the accrued interest, to be due and payable immediately.

Compensated Absences ‐ Compensated absences are liquidated by the fund that has recorded the liability. The long‐term portion of governmental activities compensated absences is liquidated by contributions from various funds, but primarily the General Fund.

Landfill Containment ‐  The City is responsible for managing and controlling methane gas and containment of leachate at three former City‐operated landfill sites.

Pursuant to a Postclosure Maintenance Plan filed with the State, the City is obligated for additional postclosure care costs for two of its landfill sites. The estimated costs of postclosure care are subject to changes such as the effects of inflation, revision of laws and other variables. The estimated amount of this obligation as of June 30, 2024, is approximately $48.0 million. Annual revenues from the Solid Waste Enterprise Fund will fund the postclosure care costs. In accordance with a State‐mandated Financial Assurance Mechanism (FAM), the City has pledged Solid Waste Enterprise Fund revenues in the amount of $3.1 million as of June 30, 2024, for postclosure care costs on these two landfill sites. A third landfill site maintained by the City did not require a FAM to be established for the closure of the site and the City’s postclosure care cost is not estimable.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 7 NONCURRENT LIABILITIES (Continued)

B. Descriptions of Noncurrent Liabilities (Continued)

Claims Liabilities ‐  The City has established various self‐insurance programs to account for and finance its uninsured risks of loss. Estimated liabilities are recorded for claims when it is probable that a loss has occurred and the amount of the loss can be reasonably determined. Further discussion on the City’s claim liabilities and Risk Management is included in Note 10.

2004 Water Revenue Bonds ‐  On September 29, 2004, the City issued $9.7 million of 2004 Water Revenue Bonds, 2004 Series A, to fund the construction of Graham Reservoir. Water fund revenues are pledged to pay the debt service on the bonds. Principal payments are payable annually on June 1 and interest payments semi‐annually on June 1 and December 1 from Water Fund Revenues. The City is considered to be in default if the City fails to pay the principal of and interest on the outstanding bonds when they become due and payable and such default has continued for a period of thirty days. Upon the occurrence and during the continuance of any event of default, the trustee may, and upon written notice from the owners of a majority in aggregate principal amount of the bonds then outstanding, declare the principal of the bonds, together with the accrued interest, to be due and payable immediately.

City of Palo Alto Loan – The Cities of Palo Alto and Mountain View began a joint project to construct a reclaimed water pipeline (Project) in 2004. In October 2007, the City of Palo Alto approved a $9.0 million loan agreement with the State Water Resources Control Board (SWRCB) to finance a portion of the Project. Under the terms of the loan agreement, the Project received $7.5 million in proceeds. The additional $1.5 million due on the loan represents in‐substance interest. Payments are due annually on the loan for twenty years following the completion of the construction. The City agreed to repay the City of Palo Alto a $6.0 million share of this loan to finance $5.0 million of the costs of the Project within the City under the same terms as the original loan agreement with SWRCB. The City will pay $300,000 annually for twenty years. The project has been completed and payments on the loan commenced on June 30, 2010. There are no acceleration provisions in the event of a payment default for this loan.

Wastewater Direct Financing Arrangement – On November 1, 2018, the City executed an Installment Sale Agreement between the City and the Financing Authority and an Assignment Agreement between the Financing Authority and Opus Bank to provide funds for Wastewater infrastructure capital projects. The financing arrangement is for up to $10.1 with a maximum term of 15 years. Wastewater fund revenues are pledged to pay the debt service on the direct financing arrangement. Principal payments are payable annually on December 1 and interest payments semi‐annually on June 1 and December 1 from Wastewater Fund Revenues. The City is considered to be in default if the City fails to pay the installment payments when they become due and payable. If an event of default has occurred and is continuing, the lender has the right to declare all unpaid installment payments, principal and accrued interest, to be due and payable immediately.

C. Debt Service Requirements

The pledge of future tax increment revenues ends upon repayment of the $142.8 million in remaining debt service on the Shoreline Community’s Revenue Bonds, which is scheduled to occur in Fiscal Year 2048‐49. For the fiscal year ended June 30, 2024, tax increment revenues amounted to $71.2 million, which represented coverage of 11.7 over the $6.1 million in debt service.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 7 NONCURRENT LIABILITIES (Continued)

C. Debt Service Requirements (Continued)

The pledge of future water fund revenues ends upon repayment of the $5.6 million in remaining debt service on the Water Revenue Bonds and City of Palo Alto Loan, which are both scheduled to occur in Fiscal Year 2028‐29. For the fiscal year ended June 30, 2024, Water Fund revenues including operating revenues, non‐operating interest earnings, capital contributions – developer fees, and transfers in amounted to $47.3 million and operating expenses, excluding depreciation or amortization amounted to $38.2 million. Net Revenues available for debt service amounted to $9.1 million, which represented coverage of 9.8 over the $926,000 in debt service.

The pledge of future wastewater fund revenues ends upon repayment of the $9.4 million in remaining debt service on the Wastewater Direct Financing Arrangement, which are scheduled to occur in Fiscal Year 2033‐34. For the fiscal year ended June 30, 2024, Wastewater Fund revenues including operating revenues, non‐operating interest earnings, capital contributions – developer fees, and transfers in amounted to $37.3 million and operating expenses, excluding depreciation or amortization amounted to $24.0 million. Net Revenues available for debt service amounted to $13.3 million, which represented coverage of 15.6 over the $852,000 in debt service.

Annual debt service requirements to maturity are as follows (dollars in thousands):

There are a number of limitations, covenants and restrictions contained in the various bond indentures. The City is in compliance with all material limitations, covenants and restrictions.

NOTE 8 PENSION PLANS

A. General Information about the Pension Plans

Plan Descriptions – All qualified regular and probationary employees are eligible to participate in either the City’s Miscellaneous (all other) or Safety (police and fire) plans (Plans), agent multiple‐employer defined benefit pension plans administered by CalPERS, which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include

regarding

the CalPERS website at www.calpers.ca.gov

the

City of Mountain View

For the Year Ended June 30, 2024

NOTE 8 PENSION PLANS (Continued)

A. General Information about the Pension Plans (Continued)

Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost‐of‐living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, age at retirement and compensation. The cost‐of‐living adjustments for the CalPERS plans are applied as specified by the Public Employees’ Retirement Law. The California Public Employees’ Pension Reform Act (PEPRA), which became effective in January 2013, changes the way CalPERS retirement and health benefits are applied, and places compensation limits on members. As such, members who established CalPERS membership on or after January 1, 2013 are known as “PEPRA” members.

The Plans’ provisions and benefits in effect as of June 30, 2024, are summarized as follows:

Hire Date

Prior toOn or after

January 1, 2013January 1, 2013

formula 2.7% 55 2.0% @ 62 Benefit vesting schedule 5 years service5 years service

payment

Hire Date

for lifeMonthly for life

Prior to On or after

January 1, 2013January 1, 2013

Benefit formula 3% @50

@57

Benefit vesting schedule 5 years service5 years service

for lifeMonthly for life

Employees Covered – Employees covered by the benefit terms for each Plan as of June 30, 2023, the most recent actuarial valuations information available, are as follows:

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 8 PENSION PLANS (Continued)

A. General Information about the Pension Plans (Continued)

Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires the employer contribution rates for all public employers to be determined on an annual basis by the CalPERS actuary and shall be effective on the July 1 following notice of a change in the rate. The actuarially determined rate is the projected amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the purpose of increasing the funded status of the Plans, the City contributed $4.09 million and $3.04 million in excess of the actuarially determined contributions for the Miscellaneous and Safety Plans, respectively, during the fiscal year ended June 30, 2024.

B. Net Pension Liability

The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

Actuarial Assumptions – The total pension liabilities in the June 30, 2022 actuarial valuations were determined using actuarial assumptions as follows:

Miscellaneous and Safety Plans

Valuation Date

Measurement Date

Actuarial Cost Method

Actuarial Assumptions:

Projected Salary Increase

Post Retirement Benefit Increase

Mortality Rate Table

June 30, 2022

June 30, 2023

Entry‐ Age Normal Cost Method

Varies by Entry Age and Service

The lessor of contract COLA or 2.30% until Purchasing Power Protection Allowance Floor on purchasing power applies, 2.30% thereafter.

Derived us i n g CalPERS membership Data for all Funds (1)

(1) The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP‐ 2020 published by th e So ciety of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

All other actuarial assumptions used in the June 30, 2022 actuarial valuation were based on the 2021 CalPERS Experience Study for the period from 2001 to 2019, including updates to salary increase, mortality and retirement rates. Further details of the 2021 CalPERS Experience Study can be found on the CalPERS website under Forms and Publications.

Change of Assumptions – There were no assumption changes in measurement period 2023.

For the Year Ended June 30, 2024 NOTE 8 PENSION PLANS (Continued)

B. Net Pension Liability (Continued)

Discount Rate – The discount rate used to measure the total pension liability was 6.90 percent. The projection of cash flows used to determine the discount rate assumed that the contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long‐term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

The long‐term expected rate of return on pension plan investments was determined using a building‐block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long‐term expected rate of return, CalPERS took into account both short

term and long

term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building‐block approach. The expected rate of return was then adjusted to account for assumed administrative expense of 10 basis points. The expected real rates of return by asset class are as follows:

(1)  ‐ An expected inflation of 2.30% used for this period.

(2)  ‐ Figures are based on the 2021 Asset Liability Management study.

City of Mountain

View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

C. Changes in the Net Pension Liability

The changes in the net pension liability for each Plan are as follows (dollars in thousands): Miscellaneous Plan:

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 8 PENSION PLANS (Continued)

C.

Changes in the Net Pension Liability (Continued)

Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate are as follows (dollars in thousands):

Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

For the fiscal year ended June 30, 2024, the City recognized pension expense of $24.7 million and $25.5 million for the Miscellaneous and Safety Plans, respectively.

The City reported deferred outflows of resources related to pensions by sources for the fiscal year ended June 30, 2024 as follows (dollars in thousands):

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 8 PENSION PLANS (Continued)

C. Changes in the Net Pension Liability (Continued)

As of June 30, 2024, the City reported $20.5 million and $17.7 million as deferred outflows of resources related to contributions subsequent to the measurement date for the Miscellaneous and Safety Plans, respectively, which will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2025. Net amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense are as follows (dollars in thousands):

NOTE 9 OTHER POSTEMPLOYMENT BENEFITS

A. General Information about the OPEB Plan

Plan Descriptions – By Council resolution and through agreements with its labor units, the City provides certain health care benefits for retirees (spouse and dependents are not included for CalPERS Miscellaneous employees, but are included for CalPERS Safety employees in the CalPERS Health Program governed by the Public Employees’ Medical and Hospital Care Act (PEHMCA)) under a single employer defined benefit OPEB plan. In December 2008, the City entered into an agreement with CalPERS to participate in the CERBT, an agent multiple‐employer other postemployment benefits plan, to fund the City’s OPEB. CERBT, administrated by CalPERS, is managed by an appointed board not under the control of the City Council. CERBT issues a publicly available financial report that can be found on the CalPERS website at www.calpers.ca.gov

The City also offers a Defined Contribution (DC) Plan to eligible miscellaneous employees. If an employee elects to participate in the DC Plan, the City makes contributions on behalf of the employee into a Health Savings Account (HSA). Employees who have elected the DC Plan are not included in the City’s actuarial valuation for OPEB.

Employees Covered – Employees covered by the benefit terms as of June 30, 2023, the most recent actuarial valuations information available, are as follows:

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 9 OTHER POSTEMPLOYMENT BENEFITS (Continued)

A. General Information about the OPEB Plan (Continued)

Benefits Provided – The City provides medical and vision OPEB benefits. The City provided OPEB by group and eligibility is as follows:

Contributions – The City’s OPEB funding policy is to contribute 100 percent or more of the actuarially determined contribution each year For the year ended June 30, 2024, the City’s contributions totaled $5.7 million. For the purpose of increasing the funded status of the OPEB Plan, the City contributed $2.0 million in excess of the actuarially determined contributions during the fiscal year ended June 30, 2024.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 9 OTHER POSTEMPLOYMENT BENEFITS (Continued)

B. Net OPEB Liability

The City’s net OPEB liability is measured as the total OPEB liability, less the OPEB plan’s fiduciary net position. The net OPEB liability is measured as of June 30, 2023 using an annual actuarial valuation as of June 30, 2023.

Actuarial Assumptions – The total OPEB liability as of June 30, 2023 were determined using actuarial assumptions as follows:

Valuation Date June 30, 2023

Measurement Date June 30, 2023

Actuarial Cost Method Entry‐ Age Normal Cost Method

Actuarial Assumptions:

Discount Rate 5.60% Inflation 2.50%

Projected Salary Increase 3.00%

Healthcare cost trend rates

6.5% in 2025, fluctuating down to 3.9% by 2075

Mortality 2021 CalPERS Experience Study

Mortality Inprovement MW Scale 2022

(1) Demographic actuarial assumptions used are based on the 2021 CalPERS Experience Study for the period from 1997 to 2019, except for using the MacLeod Watts Scale 2022 applied generationally from 2015 as the basis to project future morality improvements.

Change in Assumptions – During the measurement period 2023, the healthcare cos trend rates were changed to 6.5 percent in 2025, fluctuating down to 3.9 percent by 2075, Mortality was changed to based on 2021 CalPERS Experience Study, and Mortality Improvement was changed to based on MW Scale 2022.

Discount Rate ‐  The discount rate used to measure the total OPEB liability is 5.6 percent. The projection of cash flows used to determine the discount rate assumed that the City's contribution will be made equal to the actuarially determined contribution. Based on those assumptions, the OPEB plan's fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees. Therefore, the long‐term expected rate of return on OEPB plan investments is applied to all periods of projected benefit payments to determine the total OPEB Liability.

City of Mountain View

to Basic Financial Statements For the Year Ended June 30, 2024

B. Net OPEB Liability (continued)

The long‐term expected rate of return for OPEB plan investments is 5.60 percent. Using historical returns of all the funds’ asset classes, expected compound geometric returns were calculated over the short‐term (1‐5 years) and the long‐term (6‐20 years) using a building‐block approach. The long‐term expected real rate of return by asset class and the target allocation are as follows:

To derive the expected future trust return specifically for the City, we first adjusted CalPERS' future return expectations to align with the 2.5% general inflation assumption used in this report. Then applying the plan specific benefit payments (a s determined fro m the June 30, 2023, valuation) to CalPERS' bifurcated return expectation, we determined the single equivalent long ‐ term rate of return to be 5.6 percent.

C. Changes in the Net OPEB Liability (Asset)

The changes in the net OPEB liability (asset) are as follows (dollars in thousands):

(Decrease)

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 9 OTHER POSTEMPLOYMENT BENEFITS (Continued)

C. Changes in the Net OPEB Liability (Asset) (Continued)

Sensitivity of the Net OPEB Liability (Asset) to Changes in the Discount Rate – The net OPEB liability of the City, calculated using the discount rate of 5.60 percent, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate are as follows (dollars in thousands):

Sensitivity of the Net OPEB Liability (Asset) to Changes in the Healthcare Cost Trend Rates – The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current rate are as follows (dollars in thousands):

OPEB Plan Fiduciary Net Position – Detailed information about the OPEB plan’s fiduciary net position is available in the separately issued CERBT financial report.

D. OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB

For the fiscal year ended June 30, 2024, the City recognized OPEB Expenses of $4.4 million.

The City reported deferred outflows of resources and deferred inflows of resources related to OPEB by sources for the fiscal year ended June 30, 2024 are as follows (dollars in thousands):

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 9 OTHER POSTEMPLOYMENT BENEFITS (Continued)

D. OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)

As of June 30, 2024, the City reported $5.7 million as deferred outflows of resources related to contributions for OPEB subsequent to the measurement date, which will be recognized as a reduction of the net OPEB liability in the fiscal year ending June 30, 2025. Net amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense are as follows (dollars in thousands):

Fiscal Year

Ending June 30

NOTE 10 RISK MANAGEMENT

The City is exposed to various risks of loss related to torts, errors and omissions, injuries to employees or others, and unemployment. The City has established various self‐insurance programs to account for and finance its uninsured risks of loss. Under the self‐insurance programs, the City retains the risk of loss up to a maximum of $1.0 million for general liability and property claims, $750,000 for workers' compensation claims with statutory excess insurance and actual costs incurred for unemployment.

For general liability claims, the City has excess liability coverage through the Authority for California Cities Excess Liabilities (ACCEL) to cover the risk of loss for claims in excess of $1.0 million per incident. ACCEL is a joint powers authority of medium‐sized California municipalities, which pools catastrophic general liability, automobile liability and public officials’ errors and omissions losses. Amounts of settlements have not exceeded insurance coverage in the past three years.

Charges to the General Fund and other insured funds are determined from an analysis of self‐  insured claims costs and reserve requirements and are recorded as operating expenditures or expenses of such funds and operating revenues of the various internal service funds.

Estimated liabilities are recorded for claims in cases where such amounts are reasonably determinable and where the liability is likely for claims which are incurred through the end of the fiscal year but not reported until after that date. The estimated liability is determined based upon historical claims data discounted at 2.5 percent annually and independently determined estimates of the amounts needed to pay prior and current year claims.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 10 RISK MANAGEMENT (Continued)

Changes in accrued self‐insurance claims for the fiscal year ended June 30 are as follows (dollars in thousands):

The City has not significantly reduced its insurance coverage from the prior fiscal year. Furthermore, settlements have not exceeded insurance coverage for the past three fiscal years.

NOTE 11 LEASES

The City entered into various lease agreements as either a lessor or lessee for land, equipment, and other asset classes. As a lessee, the City is required to recognize a lease liability and an intangible right‐to‐use lease asset. As a lessor, the City is required to recognize a lease receivable and a deferred inflow of resources. The City defines leases as balances with an initial individual value of more than $200,000.

A. City as Lessor

As a lessor, the City entered into lease agreements with various lease terms. Most leases include periodic adjustments to the lease amount at determined intervals. For the year ended June 30, 2024, the City received an immaterial amount of variable and other payments from the lease arrangements.

Information about lease revenues and interest revenues recognized during the year ended June 30, 2024, as well as lease receivable and lease related deferred inflows of resources as of June 30, 2024 are as follows (dollars in thousands):

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 11 LEASES (Continued)

A. City as Lessor (Continued)

The annual lease receipt schedule for the lease receivables is as follows (dollars in thousands):

B. City as Lessee

As a lessee, the City entered into lease agreements with various lease terms. For the year ended June 30, 2024, the City had not paid any variable and other payments for the lease arrangement. As of June 30, 2024, the leased liabilities balance was $3.9 million.

The annual debt service requirement for the leases liabilities is as follows (dollars in thousands):

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 11 LEASES (Continued)

C. Significant Lease Arrangements

SFX Entertainment, Inc. ‐ On May 10, 2006, the City, the Shoreline Community, and SFX Entertainment, Inc. (SFX), wholly owned by Live Nation, entered into an Amended and Restated Amphitheatre Ground Lease Agreement (Agreement) for the period from March 15, 2006 through December 31, 2020. SFX excised the first five‐year option to extend the lease with an expiration date of December 31, 2025. A second five‐year option is at the discretion of the City. The lessee is required to pay annual base rent to the City, due in nine equal installments in the months of April through December. Beginning March 15, 2018, the lease payment shall increase 2.0 percent annually. As of June 30, 2024, the amount of lease receivable is $14.0 million.

Google LLC. (Google) ‐  On March 7, 1995, the City, as lessor, entered into a 55‐year lease with Silicon Graphics, Inc. (SGI), an entity not affiliated with the City (1995 Lease). This lease provides for the rental of City land located within the Shoreline Community upon which SGI constructed a 500,000 square foot corporate campus. On December 12, 1996, the City, as lessor, entered into another 55‐year lease with SGI (1997 Lease). This lease provides for the rental of City land located within the Shoreline Community upon which SGI constructed a second 556,000 square foot facility. On April 19, 2001, SGI assigned the two lease agreements described above to Goldman Sachs, Inc., an entity not affiliated with SGI or the City. Goldman Sachs assigned the agreements to WXIII/Crittenden Realty C, LLC on May 22, 2001, which assigned the agreements to Google on June 29, 2006. The 1995 Lease and 1997 Lease provide for rent increases of 4.0 percent per annum and the rent is to be adjusted every 10 years to the greater of 6.0 percent of the then fair value of the property or the initial base rent. As of June 30, 2024, the amount of lease receivable for the 1995 Lease and 1997 Lease are $265.0 million and $290.3 million, respectively.

On August 31, 2007, the City, as lessor, entered into a 55‐year lease with Google (2007 Lease). The lease provides for rent increases of 3.0 percent per annum and the rent is to be adjusted every 10 years to the greater of 7.0 percent of the then fair value of the property or the initial base rent. The revalued monthly rent shall not exceed 165.0 percent of the monthly rent payable during the initial year of the prior escalation period. As of June 30, 2024, the amount of lease receivable for the 2007 Lease is $109.0 million.

On April 1, 2011, the City, as lessor, entered into a 52‐year lease with Google (termination to coincide with the 2007 Lease). Google advanced the rent for the 52‐year lease term in the amount of $30.0 million to the City. As of June 30, 2024, the amount of lease receivable is $16.4 million.

In Fiscal Year 2017‐18, the City Council approved the development for the Charleston East site and approved the sublease of Parking Lots C & D between Google and SFX through December 31, 2025 to provide temporary parking space during the Charleston East Site construction. In exchange for the City’s consent to accept the sublease between Google and SFX, starting January 1, 2021, the City receives payment of $2.3 million annually with annual adjustments of 4% through December 31, 2025. On June 29, 2023, an amendment was signed and starting July 1, 2023, the City receives payment of $930,000 annually with annual adjustments of 2% through December 31, 2025. As of June 30, 2024, the amount of lease receivable is $1.4 million.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 11 LEASES (Continued)

C. Significant Lease Arrangements (Continued)

MV 101 Development, LLC ‐  On April 1, 2015, the City, as lessor, entered into a DDA and a 55‐year ground lease with MV 101 Development, LLC, (MV 101), an entity not affiliated with the City. The DDA provides for the development of 6.69 acres of land owned by the City, at 750 Moffett Boulevard, commonly referred to as Ameswell (formerly Moffett Gateway) in conjunction with adjacent land formerly owned by Caltrans and acquired by MV 101, with a hotel, office building and joint parking structure. The ground lease provides for the rental of the City land for 55 years with four 10‐year extensions. The agreement also provides for office building minimum rent upon the issuance of a building permit at $140 per buildable square foot at 5.0 percent of the fair value of the land, with increases of 3.0 percent per annum. Commencing with the 16th operating year and every 10 years thereafter, the building minimum base rent shall be increased or decreased to the current market rate based on 5.0 percent of the then current fair value of the property or the initial base rent, whichever is higher and adjusted thereafter by the annual CPI. As of June 30, 2024, the amount of lease receivable is $62.1 million.

NOTE 12 SUBSCRIPTION‐BASED INFORMATION TECHNOLOGY

ARRANGEMENTS (SBITA)

The City entered into various agreements for SBITA. The City is required to recognize a SBITA liability and an intangible right‐to‐use SBITA asset. The City defines SBITA as balances with an initial individual value of more than $200,000.

For the year ended June 30, 2024, the City had not paid any variable and other payments for the SBITA. As of June 30, 2024, the SBITA liabilities balance was $395,000.

The annual debt service requirement for the SBITA liabilities is as follows (dollars in thousands):

the Fiscal Year Ending June 30PrincipalInterestTotal

NOTE 13 NET POSITION AND FUND BALANCES

A. Net Position

Net position is the excess of all assets and deferred outflows of resources over all liabilities and deferred inflows of resources, regardless of fund. Net position is divided into three captions on the Statement of Net Position. These captions apply only to net position, which is determined at the Government‐wide level and proprietary funds and are described as follows:

Net investment in capital assets – This caption groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt, including debt related deferred outflows and inflows of resources that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 13 NET POSITION AND FUND BALANCES (Continued)

A. Net Position (Continued)

Restricted – This caption represents net position, which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws or other restrictions which the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, grant funds, funds restricted for debt service, and funds restricted to low and moderate income housing purposes.

Unrestricted – This caption represents net position of the City not restricted for any project or purpose.

B. Fund Balances

Governmental fund balances represent the assets and deferred outflows of resources less the liabilities and deferred inflows of resources of each fund. Governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on how specific amounts in the funds can be spent. For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint as follows:

Nonspendable fund balances are amounts that cannot be spent because they are either (a) not in spendable form; or (b) legally or contractually required to be maintained intact.

Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation, which requires the resources to be used only for a specific purpose. Nonspendable amounts subject to restrictions are included along with spendable resources.

Committed fund balances have constraints imposed by resolution of the City Council, which may only be altered by resolution of the City Council. Nonspendable amounts subject to Council commitments are included along with spendable resources.

Assigned fund balances are amounts constrained by the City’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Council or its designees and may be changed at the discretion of the City Council or its designees. The City Council has not delegated the authority to make assignments of fund balance. This category also includes residual fund balances of Special Revenue, Capital Projects and Debt Service Funds, which have not been restricted or committed.

Unassigned fund balance represents residual amounts that have not been restricted, committed or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds.

City of Mountain View

the Year Ended June 30, 2024

B. Fund Balances (Continued)

Detailed classifications of the City’s fund balances, as of June 30, 2024, are as follows (dollars in thousands):

For the Year Ended June 30, 2024 NOTE 13 NET POSITION AND FUND BALANCES (Continued)

C. Committed Fund Balances

The City Council adopted reserve policies and additional council actions which includes commitments of fund balances as follows:

1. The Development Services fund balances shall be used to fund the future obligations of the City’s development activity.

2. The General Fund Budget Contingency Reserve shall be used to provide one‐time financial resources during uncertain economic conditions. This reserve may be used for such things as the transitioning of positions to be eliminated, the phasing out of certain expenditures, smoothing of employee benefit changes, or anticipated or unanticipated revenue declines, as approved by City Council.

3. The General Fund Earned Lease Revenue Reserve Shall be used to accumulate the rent from the ground lease of a portion of the City’s Charleston East property to Google LLC (Google). Google prepaid $30.0 million as rent for the initial approximately 52‐year lease term. The intent is for this reserve to accumulate the rent, as it is earned, to fund one‐time expenses of the City.

4. The General Fund Property Management Reserve shall be used to provide a source of funds for obligations, which could arise from the City's leasing of property including legal services, certain responsibilities identified in land leases, environmental testing, or other costs normally incurred by a lessor.

5. The Graham Site Maintenance Reserve shall be used to fund the maintenance obligations, per the agreement with the school district, of the Graham Sports Complex, including the playing field at Graham Middle School beneath which the City has a reservoir.

6. The General Fund Transportation Reserve shall be used for the purpose of major priority transportation projects to mitigate traffic congestion, improve infrastructure, and meet the needs of the City, as authorized by the City Council.

7. The General Fund Capital Improvement Reserve, to be funded with a goal of a minimum balance of $5,000,000, shall be used for the funding of unanticipated priority capital improvement projects authorized by the City Council. To the extent possible, General Operating Fund carryovers remaining from the end of the fiscal year, not designated for other reserve purposes, may be applied to this reserve.

8. The General Fund Open Space Acquisition Reserve shall be used for the purpose of acquiring open space to meet the needs of the City and as authorized by the City Council. Proceeds from excess City‐owned properties shall fund this reserve as directed by City Council.

9. The General Fund Strategic Property Acquisition Reserve shall be used for the purpose of setting aside specific funds for the City to use for the acquisition of strategic property(ies).

10. The Childcare Commitment Reserve shall be used to fund low‐income subsidies for Childcare.

11. The Compensated Absences Reserve shall fund the disbursements of terminated or retired employees for accrued vacation and sick leave or other accrued leave as applicable. This Reserve shall be funded at a minimum of 80.0% of the accrued liabilities of the City for compensated absences such as vacation and vested sick leave.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 13 NET POSITION AND FUND BALANCES (Continued)

C. Committed Fund Balances

(Continued)

12. The Parental Leave Reserve will be reviewed annually and maintained at a level adequate to meet estimated benefit liabilities.

13. The Employee Loan Reserve shall be used to provide a source of funds for the employee homebuyer and relocation assistance programs administrated by Council Policy D‐13

14. The General Special Purpose Reserve is designated for resources the City has received to be spent on specific purposes, such as revenue received from the Tree Mitigation Fees, which shall be used for tree planting‐related expenses.

15. The Shoreline Golf Links Reserve shall be used to fund Shoreline Golf Links and related golf course operations and improvements.

D. Minimum Fund Balance / Net Position Policies

The City’s Financial and Budgetary Policy requires the City to strive to maintain the following fund balances/net position:

1. The General Fund Reserve at 20 to 25 percent of General Fund appropriations.

2. The General Fund Capital Improvement Reserve to be funded with a goal of a minimum balance of $5.0 million.

3. The Compensated Absences Reserve shall be funded at a minimum of 80 percent of the accrued liabilities of the City for compensated absences such as vacation and vested sick leave.

4. The Shoreline Regional Park Community Special Revenue Fund shall maintain a reserve of 25 percent of operating expenditures; the landfill reserve shall be incrementally increased to accumulate funds to rebuild the landfill system based on the most recent Landfill Master Plan. The reserve shall have adequate balance to rebuild the landfill system, in case of a catastrophic event; and the sea level rise reserve is to be incrementally increased to accumulate funds for projects identified in the most recent Shoreline Sea Level Rise Study. The contributed amount shall be determined annually based on the available resources, timeline of the projects, and results of the Shoreline Sea Level Rise Study.

5. The Enterprise Fund Reserves shall maintain a minimum 10 percent of operating budget for emergency, a minimum of 5 percent operating budget for contingency and a goal of 10 percent of operating budget for rate stabilization.

6. The Equipment Replacement Reserve shall be maintained to fund the replacement of capital equipment.

7. The Workers’ Compensation Self‐Insurance Reserve shall be maintained at 70 percent confidence level for the projected liabilities as determined by an actuarial valuation to be conducted at least once every three years.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 13 NET POSITION AND FUND BALANCES (Continued)

D. Minimum Fund Balance / Net Position Policies (Continued)

8. The Liability Self‐Insurance Reserve shall be maintained at a 70 percent confidence level for the projected liabilities as determined by an actuarial valuation to be conducted at least once every three years.

9. The Unemployment Self‐Insurance Reserve and the Employee Benefit Plan Reserve shall be reviewed annually and maintained at a level adequate to meet estimated benefit liabilities.

E. Landfill Containment Reserve

In 2013, CalRecycle regulations required the City to create a reserve, in whole or incrementally, for potential corrective actions associated with a non‐water release event at the landfill site. The estimated costs of the corrective actions are adjusted annually by an inflation factor approved by CalRecycle. On June 25, 2013, the City Council approved to restrict funds for landfill containment in the Landfill reserve of the Shoreline Community Fund. The City estimated the costs for the corrective actions to be $1.3 million for the fiscal year ended June 30, 2024, and $12.0 million to rebuild a new landfill system. As of June 30, 2024, the City restricted $12.0 million for landfill containment and planned to increase the balance to accumulate funds to rebuild the landfill system based on the most recent Landfill Master Plan.

NOTE 14 COMMITMENTS AND CONTINGENCIES

A. Encumbrances

The City’s outstanding encumbrances as of June 30, 2024, are as follows (dollars in thousands):

Balance

B. Litigation

The City is a defendant in several lawsuits and other matters arising in the normal course of operations. The City's management and legal counsel are of the opinion the potential claims against the City not covered by insurance resulting from such litigation would not materially affect the financial position of the City.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 14 COMMITMENTS AND CONTINGENCIES (Continued)

C. City of Palo Alto Regional Water Quality Control Plant

The City transmits its wastewater for treatment to a system of transmission, treatment and disposal of wastewater (the “Joint System” or “Treatment Plant”) owned and administered by the City of Palo Alto. The Joint System is governed by an agreement between the City of Palo Alto, the City of Mountain View, and the City of Los Altos (the Partners) for the acquisition, construction and maintenance of the Joint System (Agreement). As part of the Agreement, the City purchases treatment capacity at the Treatment Plant. The Agreement provides that the City will purchase capacity through December 31, 2060, and for the City of Palo Alto to set service charges annually with quarterly billings based on estimated use. A reconciliation of actual to estimated charges is completed annually. For the fiscal year ended June 30, 2024, these costs totaled $14.9 million, which is included as a component of cost of sales and services expenses in the Wastewater Enterprise Fund.

The Agreement has been supplemented or amended from time to time. Addenda include provisions for improvements to the Joint System for which debt was issued by the City of Palo Alto and the Partners agreed to pay their share of debt based on capacity rights. Each Partner’s share of debt is included in the annual budget provided by the City of Palo Alto and is billed through the quarterly billings. For the fiscal year ended June 30, 2024, the City’s share of debt services totaled to $1.0 million.

D. Sunnyvale Material Recovery and Transfer (SMaRT®) Station

During Fiscal Year 1992‐93, the City entered into a Memorandum of Understanding (MOU) with the City of Sunnyvale to obtain solid waste and recycling services at the SMaRT® Station. The MOU provides that the City has capacity share of 23.45 percent of this facility for 30 years which expired during Fiscal Year 2021‐22. The City entered into a new MOU with the City of Sunnyvale with an effective date of January 1, 2022 and termination date of December 31, 2036. Annual service charges are determined based on actual per‐ton charges. For the fiscal year ended June 30, 2024, these costs totaled $6.4 million.

E. Education Enhancement Reserve Joint Powers Agreement (JPA)

On June 30, 2013, the Shoreline Community entered into an Education Enhancement JPA with the Mountain View Los Altos Unified High School District (MVLAUHSD) and the Mountain View Whisman School District (MVWSD) effective July 1, 2013, for a period of 10 years, superseding any prior agreements dating back to the first such agreement in 2006. The purpose of the Education Enhancement JPA is to create an Education Enhancement Reserve in which funds provided by the Shoreline Community are used to enhance the educational and technology capacity of students in the districts, which will contribute to the availability of a local technology workforce to further the objectives of the Shoreline Community. The agreement provides for minimum annual payments, which commenced with the fiscal year ended June 30, 2014, and have increased annually based on growth in property tax revenues in the preceding fiscal year. Each subsequent fiscal year increases based on growth in property tax revenues in the preceding fiscal year. For the fiscal year ended June 30, 2024, the Shoreline Community paid a total of $10.7 million in contributions to the school districts, including $6.5 million to MVWSD and $4.2 million to MVLAUHSD.

A one‐year successor agreement was executed in June 2023 for the period of July 1, 2023 through June 30, 2024. An amendment was subsequently executed in Oct 2024, extending the agreement through June 30, 2027.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 14 COMMITMENTS AND CONTINGENCIES (Continued)

F. Tax Revenue Sharing

Pursuant to an agreement between the City, the Shoreline Community, and the County dated June 22, 2005, the Shoreline Community is annually obligated to pay the County from tax revenues, an amount equal to the County’s total retirement tax override levies and pass‐through an additional amount of taxes that would have been allocated to the County in the absence of the existence of the Shoreline Community. For the fiscal year ended June 30, 2024, $2.4 million and $3.1 million in retirement tax override levies and pass‐through payments, respectively, were paid to the County.

G. Bay Area Water Supply and Conservation Agency Revenue Bonds Surcharge

The City contracts with the City and County of San Francisco for the purchase of water from the Hetch Hetchy System operated by the San Francisco Public Utilities Commission (SFPUC). The City is also a member of the Bay Area Water Supply and Conservation Agency (BAWSCA), which represents the interests of all the 24 cities and water districts, as well as two private utilities, that purchase wholesale water from the SFPUC.

Under the 2009 25‐year agreement with the SFPUC, a minimum water delivery level is included. On June 21, 2017, the City entered an agreement to permanently transfer all rights, title and interest of 1.0 MGD of annual Individual Supply Guarantee to the City of East Palo Alto (EPA). After SFPUC approved the agreement, the City received a one‐time payment of $5.0 million in Fiscal Year 2017‐18 from EPA for the 1.0 MGD water rights. For the fiscal year ended June 30, 2024, the City made a $4.0 million payment to the SFPUC o meet the City’s minimum water purchase requirement of 8.930 MGD.

In addition, under the agreement, the SFPUC issues revenue bonds and the debt service (which also includes an interest component) is paid for through rates over the life of the bonds. Prior assets under the previous agreement were transferred to the new agreement and assigned a life with an agreed upon rate of return of 5.13 percent.

BAWSCA issued Revenue Bonds (Bonds) in the principal amount of $335.8 million in January 2013 to prepay the capital cost recovery payment obligation and fund a stabilization fund. The Bonds mature in October 2034 and are secured by surcharges to the monthly water purchase charges imposed upon the participating members. The Bonds are not a debt obligation of any member, and BAWSCA’s failure to pay its Bonds would not constitute a default by any participating member.

The City paid its surcharge of $1.3 million during the fiscal year ended June 30, 2024, which is included as a component of cost of sales and services expenses in the Water Enterprise Fund. The surcharge for Fiscal Year 2024‐25 is estimated to be $1.2 million.

City of Mountain View

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 14 COMMITMENTS AND CONTINGENCIES (Continued)

H. Education Revenue Augmentation Fund

In 1992, as a way of solving its own budget shortfalls, the State enacted legislation that shifted partial financial responsibility for funding K‐14 education to local government. Property tax revenues belonging to cities, counties, and special districts were shifted to the Education Revenue Augmentation Fund (ERAF). When the State shifts more local property tax than required, these funds are returned to cities, counties and special districts and are known as excess ERAF.

In November 2021, the County notified cities that the California School Boards Association and its Education Legal Alliance filed a lawsuit against the Controller of the State of California, disputing the calculation and disbursement of excess ERAF funds. As a result, the County estimates that 20 to 30 percent of ERAF disbursed to all cities over three years is subject to litigation. The County encouraged each agency to reserve 22 percent of the Excess ERAF distribution on an ongoing basis and going back to Fiscal Year 2020‐21. With the 22 percent calculation, the City estimated the amount at risk is approximately $7.1 million. Excess ERAF revenue for Fiscal Year 2024‐25 has been projected at $9.5 million, $2.4 million more than the at‐risk amount. To be conservative, the City recorded a liability of $2.7 million as of June 30, 2024, for potential future payments related to the litigation. The City will continue to evaluate this issue and will determine at each fiscal year‐end if a payable should be recorded for the litigation.

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City of Mountain View

Required Supplementary Information

For the year ended June 30, 2024 (Dollars in Thousands)

Schedule of Changes in the Net Pension Liability and Related Ratios ‐ Miscellaneous Plan Last Fiscal 10 Years*

Notes to the Schedule:

BenefitChanges ‐ Thefiguresabovegenerallyincludeanyliabilityimpactthatmayhaveresultedfromvoluntarybenefitchanges thatoccurredonorbeforetheMeasurementDate.However,offersofTwoYearsAdditionalServiceCredit(a.k.a.Golden Handshakes)thatoccurredaftertheValuationDatearenotincludedinthefiguresabove,unlesstheliabilityimpactisdeemedtobe materialbytheplanactuary.In2022,SB1168increasedthestandardretireelumpsumdeathbenefitfrom$500to$2,000forany death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.

Changeinassumptions ‐ Duringmeasurementperiod2014,thediscountratewas7.50%.Duringmeasurementperiod2015,the discountratewasincreasedfrom7.50%to7.65percent.Thereisnochangeindiscountrateduringmeasurementperiod2016.During measurementperiod2017,thediscountratewasreducedfrom7.65%to7.15percent.Duringmeasurementperiod2018, demographicassumptionsandinflationratewerechangedinaccordancetothe2017CalPERSExperienceStudy.Therewereno changesinassumptionsduringmeasurementperiods2019,2020,and2021.Duringmeasurementperiod2022,thediscountratewas reducedfrom7.15%to6.90%,inflationratewasreducedfrom2.50%to2.30%,anddemographicassumptionswerechangedin accordance with the 2021 CalPERS Experience Study. There were no changes in assumptions during measurement period 2023.

City of Mountain View

Required Supplementary Information

For the year ended June 30, 2024 (Dollars in Thousands)

Schedule of Changes in the Net Pension Liability and Related Ratios ‐ Safety Plan Last Fiscal 10 Years*

ended

Notes to the Schedule:

BenefitChanges ‐ Thefiguresabovegenerallyincludeanyliabilityimpactthatmayhaveresultedfromvoluntarybenefitchanges thatoccurredonorbeforetheMeasurementDate.However,offersofTwoYearsAdditionalServiceCredit(a.k.a.Golden Handshakes)thatoccurredaftertheValuationDatearenotincludedinthefiguresabove,unlesstheliabilityimpactisdeemedto bematerialbytheplanactuary.In2022,SB1168increasedthestandardretireelumpsumdeathbenefitfrom$500to$2,000for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.

Changeinassumptions ‐ Duringmeasurementperiod2014,thediscountratewas7.50%.Duringmeasurementperiod2015,the discountratewasincreasedfrom7.50%to7.65%.Thereisnochangeindiscountrateduringmeasurementperiod2016.During measurementperiod2017,thediscountratewasreducedfrom7.65%to7.15%.Duringmeasurementperiod2018,demographic assumptionsandinflationratewerechangedinaccordancetothe2017CalPERSExperienceStudy.Therearenochangein assumptionsduringmeasurementperiods2019,2020,and2021.Duringmeasurementperiod2022,thediscountratewasreduced from7.15%to6.90%,inflationratewasreducedfrom2.50%to2.30%,anddemographicassumptionswerechangedinaccordance with the 2021 CalPERS Experience Study. There were no changes in assumptions during measurement period 2023.

City of Mountain View

Required Supplementary Information

For the year ended June 30, 2024 (Dollars in Thousands)

Year Ended June 30,

Fiscal Year Ended June 30,

Theactuarlalmethodsandassumptionsusedtosettheactuariallydeterminedcontributionsforthe fiscal year ended June 30, 2024 were as follows:

June 30, 2024 June 30, 2021

4.50%, net of pension plan investment and administrative expenses, includes inflation.

The probabilities of retirement are based on the 2021 CalPERS Experience Study.

The probabilities of mortality are based on the 2021 CalPERS Experience Study.

201920202021202220232024

201920202021202220232024

City

of Mountain View

Required Supplementary Information

For the year ended June 30, 2024 (Dollars in Thousands)

of Changes in the Net OPEB Liability and Related Ratios

Changeinassumptions ‐ Duringmeasurementperiod2019,thediscountratewasreducedfrom6.50percentto6.25percent.Demographic assumptionswerechangeinaccordancetothe2017CalPERSExperienceStudy.Thereisnochangeinassumptionsduringmeasurementperiod 2020.Duringthemeasurementperiod2021,thediscountratewasreducedfrom6.25percentto6.00percent.Inflationratewasreducedfrom 2.75percentto2.50percent.Otherassumptionsincludingprojectedsalaryincrease,postretirementbenefitincrease,andotherdemographic assumptionswerealsochanged.Duringthemeasurementperiod2022,thediscountratewasreducedfrom6.00percentto5.60percent.During themeasurementperiod2023,thehealthcarecosttrendrateschangedto6.5%in2025,fluctuatingdownto3.9%by2075andinvestmentrateof return reduced from 6.00% to 5.60%.

*Fiscal year ended June 30, 2018 was the first year of implementation of GASB Statement No. 75, therefore only seven years of information is shown.

202220232024

202120222023

City of Mountain View

Required Supplementary Information

For the year ended June 30, 2024 (Dollars in Thousands)

Schedule of Employer OPEB Contributions

Fiscal Year Ended June 30,

The actuarialmethods and assumptionsusedtosettheactuariallydeterminedcontributionsforthefiscalyearended June 30, 2024 were as follows:

ADC for fiscal year

June 30, 2024

Actuarial valuation date June 30, 2023

Actuarial cost method

Entry‐Age Normal Cost Method Asset

Mortality

Mortality Improvement

For medical plan premiums: 6.50% for the year beginning, fluctuating down to 3.90% by 2075

Based on 2021 CalPERS Experience Study

Based on MacLeod Watts Scale 2022

*Fiscal year ended June 30, 2017 was the first year of implementation of GASB Statement No. 75, therefore only eight years of information is shown.

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OTHER SUPPLEMENTARY INFORMATION

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City of Mountain View

Statement of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual

Park Land Dedication Capital Project

For the year ended June 30, 2024 (Dollars in Thousands)

REVENUES:

FINANCING SOURCES (USES):

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City of Mountain View

Nonmajor Governmental Funds

June 30, 2024

SPECIAL REVENUE FUNDS

Gas Tax Fund

TheGasTaxFundaccountsforgastaxrevenuesreceivedfromtheStateandexpendedforconstructionandmaintenance of City streets.

Other Streets and Transportation Fund (Formerly Vehicle Registration Fees Fund)

TheOtherStreetsandTransportationFund(FormerlyVehicleRegistrationFeesFund)accountsforfeesthatvoters approvedtocollectfromvehicleregistrationsaccountsforvotersapprovedvehicleregistrationsfeesandsalestaxesused to fund local road improvements and repairs, and enhance transit, highways, expressways and active transportation.

Construction and Conveyance Tax Fund

TheConstructionandConveyanceTaxFundaccountsforrevenuesfromtaxesonrealpropertytransferredintheCity. Theserevenuesareusedforacquisition,improvement,maintenance,expansionorimplementationoftheCapital Improvements Program.

Other Developer Fees Fund

TheOtherDeveloperFeesFundaccountsforrevenuestobeusedtoencouragedevelopmentandrejuvenationof areas served by transit facilities.

CSFRA / Rental Housing Committee Fund

TheCSFRA/RentalHousingCommitteeFundaccountsfortheactivitiesrelatedtostabilizerentsandprovidejustcause eviction protections for certain rental units in the City.

Mobile Home Rent Stabilization Ordinance Fund

TheMobileHomeRentStabilizationOrdinanceFundaccountsfortheactivitiesrelatedtostabilizerentsandprotectthe rights for both the mobile home residents and the mobile park owners in the City.

Housing Successor Fund

TheHousingSuccessorFundaccountsfortheactivitiesrelatedtothehousingassetsassumedbytheCityasHousing SuccessortotheformerRevitalizationAuthority.TheactivitiesaregovernedbyCaliforniaredevelopmentlawandmustbe used to provide housing for people with low and moderate incomes.

Shoreline Golf Links Fund

TheShorelineGolfLinksFundaccountsforrevenuesfromuserfeesatShorelineGolfLinksandrelatedgolfcourse operations and improvements.

Downtown Benefit Assessment District Fund

TheDowntownBenefitAssessmentDistrictFundaccountsforrevenuereceivedforoffstreetparking,feespaidin‐lieuof providingparkingintheDistrictandforannualadvaloremrateanddirectassessmentsleviedagainstthepropertyowners within the

City of Mountain View

Nonmajor Governmental Funds

June 30, 2024

SPECIAL REVENUE FUNDS

(Continued)

General Special Purpose Fund

The General Special Purpose Fund accounts for fees paid for replacement trees and the CASp training program.

Police Asset Forfeitures Fund

ThePoliceAssetForfeituresFundaccountsforfundsderivedfromcriminalassetsseizedbypolice,primarilyfromillegal narcotics sales activity.

Grants Fund

TheGrantsFundaccountsforgrantsreceived,includingCommunityDevelopmentBlockGrants,HomeInvestment PartnershipActGrants,theLocalLawEnforcementBlockGrantProgram,theSupplementalLawEnforcementServices Grants and Traffic Safety grants

Cable Television Fund

TheCableTelevisionFundaccountsforPublic,EducationandGovernment(PEG)feescollectedbythecableprovidersand restrictedforPEGchannelsupport.TheCitypassesaportionofthesefundsthroughtoathirdpartytoprovidepublic, governmental and educational access television services.

Deferred Assessments Fund

TheDeferredAssessmentsFundaccountsforaprogramwhichallowscertainpropertyownerstodeferupto100percent of any special assessment levied on their property. The assessment becomes due upon certain specified occurrences.

DEBT SERVICE FUNDS

Shoreline Regional Park Community 2011 Revenue Bonds

Fund

TheShorelineRegionalParkCommunity2011RevenueBondsFundaccountsfortheresourcesusedforthepurposeof payingtheprincipal,interestandrelatedcostsontheShorelineRegionalParkCommunity2011RevenueBondsasthey become due.

Shoreline

Regional Park Community 2018 Revenue

Bonds Fund

TheShorelineRegionalParkCommunity2018RevenueBondsFundaccountsfortheresourcesusedforthepurposeof payingtheprincipal,interestandrelatedcostsontheShorelineRegionalParkCommunity2018RevenueBondsSeriesA and Series B as they become due.

Shoreline

Regional Park Community

2022 Revenue Bonds Fund

TheShorelineRegionalParkCommunity2022RevenueBondsFundaccountsfortheresourcesusedforthepurposeof payingtheprincipal,interestandrelatedcostsontheShorelineRegionalParkCommunity2022RefundingRevenueBonds Series A as they become due.

City of Mountain View

Nonmajor Governmental Funds

June 30, 2024

DEBT SERVICE FUNDS (Continued)

Special Assessments Fund

TheSpecialAssessmentsFundaccountsforresourcesfinancedbyspecialassessmentsleviedagainstpropertyreceiving special benefits, contributions from other funds for general benefits and certain reserve requirements.

CAPITAL PROJECTS FUNDS

Storm Drain Construction Fund

TheStormDrainConstructionFundaccountsforrevenuesderivedfromoff‐sitedrainagefeesusedforstormdrainprojects in the Capital Improvements Program.

City of Mountain View

Nonmajor Governmental Funds

June 30, 2024 (Dollars in Thousands)

City of Mountain View

Nonmajor Governmental Funds

June 30, 2024

(Dollars in Thousands)

City of Mountain View

Combining Statement of Revenues, Expenditures and Changes in Fund Balances

Nonmajor Governmental Funds

For the year ended June 30, 2024 (Dollars in Thousands) REVENUES:

City of Mountain View

Combining Statement of Revenues, Expenditures and Changes in Fund Balances

Nonmajor Governmental Funds

For the year ended June 30, 2024 (Dollars in Thousands)

City of Mountain View

Statement of Revenues, Expenditures and Changes in Fund Balances

For the year ended June 30, 2024 (Dollars in Thousands)

EXPENDITURES:

FINANCING SOURCES (USES):

City of Mountain View

Statement of Revenues, Expenditures and Changes in Fund Balances

Other Streets and Transportation

For the year ended June 30, 2024 (Dollars in Thousands)

and

City of Mountain View

Statement of Revenues, Expenditures and Changes in Fund Balances ‐

Construction & Conveyance Tax

For the year ended June 30, 2024 (Dollars in Thousands)

REVENUES:

City of Mountain View

Other Developer Fees

For the year ended June 30, 2024 (Dollars in Thousands)

City of Mountain View

Statement of Revenues, Expenditures and Changes in Fund Balances

CSFRA / Rental Housing Committee

For the year ended June 30, 2024 (Dollars in Thousands)

FINANCING SOURCES (USES):

City

Mountain View

Mobile Home Rent Stabilization Ordinance (MHRSO)

For the year ended June 30, 2024 (Dollars in Thousands)

City

Mountain View

Housing Successor

For the year ended June 30, 2024 (Dollars in Thousands)

EXPENDITURES:

City of Mountain View

Statement of Revenues, Expenditures and Changes in Fund Balances

Shoreline Golf Links

For the year ended June 30, 2024 (Dollars in Thousands)

SOURCES (USES):

City of Mountain View

Downtown Benefit Assessment District

For the year ended June 30, 2024 (Dollars in Thousands)

View

General Special Purpose

For the year ended June 30, 2024 (Dollars in Thousands)

City of Mountain View

Statement of Revenues, Expenditures and Changes in Fund Balances

Police Asset Forfeitures

For the year ended June 30, 2024 (Dollars in Thousands)

City of Mountain View

Expenditures

For the year ended June 30, 2024 (Dollars in Thousands)

FUND BALANCES:

City of Mountain View

For the year ended June 30, 2024 (Dollars in Thousands)

City of Mountain View

Statement of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual Deferred Assessments

For the year ended June 30, 2024 (Dollars in Thousands)

REVENUES:

EXPENDITURES:

REVENUES OVER (UNDER) EXPENDITURES

FINANCING SOURCES (USES):

City

Mountain View

For the year ended June 30, 2024 (Dollars in Thousands)

EXPENDITURES:

City of Mountain View

Internal Service Funds

June 30, 2024

Equipment Maintenance and Replacement Fund

The Equipment Maintenance and Replacement Fund accounts for equipment maintenance services provided to other funds and the replacement of certain equipment.

Workers' Compensation Insurance Fund

The Workers' Compensation Insurance Fund accounts for the City's self‐insurance program for workers' compensation benefits and for the administration of safety and loss prevention programs.

Unemployment Self‐Insurance Fund

The Unemployment Self‐Insurance Fund accounts for State and Federal‐mandated unemployment insurance benefits for employees.

Liability Self‐Insurance Fund

The Liability Self‐Insurance Fund accounts for the City's general liability self‐insurance and property insurance programs.

Retirees' Health Plan Fund

The Retirees' Health Plan Fund accounts for the health plan contributions for retirees of the City and the funds set aside for future retirees' benefits.

Employee Benefits Plan Fund

The Employee Benefits Plan Fund accounts for the City's self‐insurance vision and other benefits for City employees.

City of Mountain View

June 30, 2024

in Thousands)

City of Mountain View

Combining

Statement of Revenues, Expenses and Changes in Net Position

Internal Service Funds

For the year ended June 30, 2024 (Dollars in Thousands)

City of Mountain View

Combining Statement of Cash Flows

Internal Service Funds

For the year ended June 30, 2024 (Dollars in Thousands)

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City of Mountain View

June 30, 2024

Fire Union Custodial Fund

The Fire Union Custodial Fund accounts for money received on behalf of the Fire Union used for union activities.

Police Union Custodial Fund

The Police Union Custodial Fund accounts for money received on behalf of the Police Union used for union activities.

Flexible Benefits Plan Custodial Fund

TheFlexibleBenefitsPlanCustodialFundaccountsformoneyreceivedfromemployeesfortheemployer'sflexible benefits plan established under Internal Revenue Code Section 125.

Center for the Performing Arts Custodial Fund

TheCenterforthePerformingArtsCustodialFundaccountsformoneyreceivedbytheCenterforthePerformingArtson behalf of the event organizers.

City of Mountain View

Combining Statement of Fiduciary Net Position

For the year ended June 30, 2024 (Dollars in Thousands)

City of Mountain View

Combining Statement of Changes in Fiduciary Net Position

For the year ended June 30, 2024 (Dollars in Thousands)

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STATISTICAL SECTION

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CITY OF MOUNTAIN VIEW, CALIFORNIA

Statistical Section

For the Fiscal Year Ended June 30, 2024

This section of the City's Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.

Financial Trends

These schedules contain trend information to help the reader understand how the City's financial performance and well‐being have changed over time.

Revenue Capacity

These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax.

Debt Capacity

These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.

Demographic and Economic Information

These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.

Operating Information

These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs.

Sources

Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant year.

CITY OF MOUNTAIN VIEW, CALIFORNIA

Net Position by Component

Last Ten Fiscal Years (Dollars in Thousands)

(1)The Unrestricted Net Position decreased in fiscal year ended June 30, 2018 due to the implementation of GASB No. 75.

(2)The Unrestricted Net Position restated in fiscal year ended June 30, 2021 due to the implementation of GASB No. 87.

CITY OF MOUNTAIN VIEW, CALIFORNIA

CITY

OF MOUNTAIN VIEW, CALIFORNIA

Changes in Net Position

Last Ten Fiscal Years (Dollars in Thousands)

(1)California Water and Wastewater Arrearage Payment Program funding received in Fiscal Year 2021‐22 applied to delinquent water and wastewater bills during the COVID‐19 pandemic.

CITY OF MOUNTAIN VIEW, CALIFORNIA

Changes in Net Position

Last Ten Fiscal Years (Dollars in Thousands)

CITY OF MOUNTAIN VIEW, CALIFORNIA

Fund Balances of Governmental Funds

Last Ten Fiscal Years (Dollars in Thousands)

CITY OF MOUNTAIN VIEW, CALIFORNIA

CITY OF MOUNTAIN VIEW, CALIFORNIA

Changes in Fund Balances of Governmental Funds

Last Ten Fiscal Years

(Dollars in Thousands)

Fiscal Year Ended June 30,

(1)Beginning the fiscal year ended June 30, 2017, the City reclassified Developer fees & contributions from various revenue line items. The City elected not to reclassify prior years' balances.

Fiscal Year Ended June 30,

20202021202220232024

CITY OF MOUNTAIN VIEW, CALIFORNIA

Assessed Value of Taxable Property

Last Ten Fiscal Years (Dollars in Thousands)

2014‐1511,604,492 $ 3,392,658 $ 2,671,439 $ 925,685 $ 2015‐1612,697,5033,633,892 3,381,6581,016,306

2016‐1714,015,191 4,794,1583,420,2981,125,702

2017‐1815,613,793 5,376,7313,676,6161,072,122

2018‐1916,641,242 6,027,2993,944,1041,087,814

2019‐2018,323,758 6,408,1564,373,0201,386,810

2020‐2120,011,424 6,971,5324,498,5461,936,547 2021‐2221,255,921 7,778,6494,680,8792,537,478

2022‐2323,103,147 8,136,1535,125,8513,454,199 2023‐2424,560,282 8,893,3675,488,2943,771,063

Source:Santa Clara County Assessor

Note:Actual property value data not available in California.

(1)California cities do not set their own direct tax rate. The state constitution establishes the rate at 1 percent and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. The City of Mountain View encompasses more than 15 tax rate areas.

45,000,000 ($ 000)

CITY OF MOUNTAIN VIEW, CALIFORNIA

Total Taxable Assessed Value

Less:Total Taxable Tax‐ExemptAssessedTotal Direct UnsecuredPropertyValueTax Rate (1)

2,444,399 $ (1,011,970) $ 20,026,703 $ 1.00% 2,689,859(993,411)22,425,8071.00%

2,972,482(1,094,913) 25,232,9181.00%

3,437,332(1,145,258) 28,031,3361.00% 2,830,453(1,125,615) 29,405,2971.00% 2,816,506(1,400,344) 31,907,9061.00% 2,969,624(1,611,881) 34,775,7921.00% 2,815,937(1,487,266) 37,581,5971.00% 2,873,920(1,643,803) 41,049,4671.00% 3,220,524(1,650,242) 44,283,2881.00% 0 5,000,000 10,000,000 15,000,000

CITY OF MOUNTAIN VIEW, CALIFORNIA

Direct and Overlapping Property Tax Rates

Last Ten Fiscal Years (Rate per $100 of assessed value)

Overlapping Rates (1)

Source: County of Santa Clara

(1)Overlapping rates are those of local and county governments that apply to property owners within the City of Mountain View. Not all overlapping rates apply to all Mountain View property owners. These are voter approved levies in addition to the 1 percent State levy (2)The City's share of the basic state wide property tax rate can only be increased by a 2/3 vote of the City's residents.

CITY OF MOUNTAIN VIEW, CALIFORNIA

Principal Property Tax Payers

Current Year and Nine Years Ago (Dollars in Thousands)

Source: Santa Clara County Assessor Fiscal Year Combined Tax Rolls. Ranking based on Tax Revenue.

CITY OF MOUNTAIN VIEW, CALIFORNIA

Property Tax Levies and Collections

Last Ten Fiscal Years (Dollars in Thousands)

Source: City of Mountain View

(1)Levies include real and personal property. Amount excludes Special Assessments and the penalties and fees on delinquent Special Assessments.

(2)The City selected to participate in the "Teeter" plan offered by the County whereby cities receive 100 percent of the taxes levied in exchange for foregoing any interest and penalties collected on delinquent taxes. The "Teeter" plan does not apply to Special Assessment Districts.

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CITY OF MOUNTAIN VIEW, CALIFORNIA

Ratio of Outstanding Debt by Type

Last Ten Fiscal Years (Dollars in Thousands)

Sources:City of Mountain View State of California, Department of Finance (population)

U.S. Department of commerce, Bureau of the Census (income)

(1)Includes the City of Palo Alto Loan. See Note 7 for additional information.

(2)See Schedule 14 (Demographic Statistics) for personal income and population data.

(3)Includes 2018 SRPC Revenue Bonds, Series A and Series B (2018 Bonds).

(4)Personal income data for Fiscal Year 2023‐24 is not available until May of 2025.

(5)Fiscal Year 2022‐23 restated to include SBITA liabilities.

CITY OF MOUNTAIN VIEW, CALIFORNIA

CITY OF MOUNTAIN VIEW, CALIFORNIA

Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years (Dollars in Thousands)

(1) Per capita numbers are restated as updated population numbers are available. (2) Total bonds outstanding increased due to issuance of 2018 SRPC Revenue Bonds, Series A and Series B.

CITY OF MOUNTAIN VIEW, CALIFORNIA

Direct and Overlapping Governmental Activities Debt

As of June 30, 2024 2023‐24 Assessed Valuation: $44,283,287,677 (A)

(3) (4)

(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.

(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue bonds and non‐bonded capital lease obligations.

(3) Includes unamortized premium of $5,222,894 for direct debt.

(4) Includes lease and SBITA liabilities.

Source: California Municipal Statistics, Inc.

(A)The assessed valuation number provided by Santa Clara County Assessor.

CITY OF MOUNTAIN VIEW, CALIFORNIA

Legal Debt Margin Information

Last Ten Fiscal Years (Dollars in Thousands)

Fiscal Year

(1)Source: Santa Clara County Assessor.

(2)The legal debt margin for the City of Mountain View, California, is calculated using a debt limit of 15 percent of the assessed value of property within the city limits.

Legal Debt Margin Calculation for Fiscal Year 2023‐24

Assessed value (net) ‐ June 30, 2024 (1)

$44,283,288

Debt limit: 15% of assessed value 6,642,493

Less total bonded debt, general obligation ‐

Legal debt margin (2) $6,642,493

CITY OF MOUNTAIN VIEW, CALIFORNIA

$18,000 ($ 000)

Note:

$14,000 $16,000

CITY OF MOUNTAIN VIEW, CALIFORNIA

CITY OF MOUNTAIN VIEW, CALIFORNIA

CITY OF MOUNTAIN VIEW, CALIFORNIA

CITY OF MOUNTAIN VIEW, CALIFORNIA

Demographic Statistics

Last Ten Fiscal Years (Dollars in Thousands)

PopulationPer Capita FiscalDensityPersonal PersonalSchool

YearPopulation (1)(Sq. Mile) (2)Income (3)Income (3)Enrollment

2014‐1578,5646,4405,892,300757,5523.9% 2015‐1679,4296,5116,433,749817,5774.0% 2016‐1779,9666,5557,356,872927,6203.5%

2017‐1880,1046,5668,010,4001007,6782.9% 2018‐1980,9866,6388,746,4881087,7192.6% 2019‐2082,3766,7529,555,6161167,5119.3%

2020‐2183,1286,81410,307,8721247,4274.8% 2021‐2283,8566,81811,655,9841397,2942.3%

2022‐2384,4636,86712,162,6721447,1463.9% 2023‐2486,5357,035(4)(4)7,2124.4%

Sources:Santa Clara County Office of Education. State of California, Department of Finance.

U.S. Census Bureau.

(1) Population numbers are provisional estimates as of January 1st, revised annually.

(2) Population Density per square mile calculations are restated from 12.2 to 12.3 square miles starting Fiscal Year 2021‐22.

(3) Per capita personal income and unemployment rate are for Santa Clara County. Personal income is the product of the countywide per capita amount and the City's population.

(4) Personal income data for Fiscal Year 2023‐24 is not available until May of 2025. Unemployment Rate (%) (3)

CITY OF MOUNTAIN VIEW, CALIFORNIA

Principal Employers

Current Year and Nine Years Ago

Sources: City of Mountain View Business License Data Silicon Valley Business Journal Company Representatives

CITY OF MOUNTAIN VIEW, CALIFORNIA

Source: City of Mountain View

(1) Housing is a new department established in FY 2023‐24. Total FY 2023‐24 FTE includes transfer of 13.5 positions from the Community Development Department and a newly added position.

CITY OF MOUNTAIN VIEW, CALIFORNIA

CITY OF MOUNTAIN VIEW, CALIFORNIA

Operating Indicators by Function/Program Last Ten Fiscal Years

Fiscal Year Ended June 30,

Source: City of Mountain View

(1)Beginning in the Fiscal Year ended June 30, 2016, includes total multi‐family housing inspections completed by FEPD not previously accounted for.

(2)Lower due to vacancy and turnover in personnel, resulting in reduced staffing.

(3)For the Fiscal Year ended June 30, 2016, Police calls for service number is restated. Number of calls have decreased due to the different way the new CAD system records some activities.

(4) Fiscal Year ended June 30, 2023 was restarted in Fiscal Year ended June 30, 2024 due to PD using a new records management software (RMS).

(5)The City was unable to advertise and bid the surface project and therefore street resurfacing project was delayed.

(6)Methodology to estimate number of sewer connections changed to reflect more accurate count.

(7)Fiscal Year ended June 30, 2018 was restated in Fiscal Year ended June 30, 2019 due to incorrect figures reflected for the year.

(8) Includes curbside, multi‐family, commercial and school recycling, yard waste, debris box recycling, MV Recycling Center, and recyclables recovered from refuse at the SMaRT station.

(9) Variance, unless otherwise noted, due to the COVID‐19 public health crisis and Shelter‐in‐Place restrictions.

Fiscal Year Ended June 30,

20192020 (9) 2021 (9) 2022 (9) 20232024

6,1886,1205,6046,7417,9797,820 2,2622,4981,4011,3211,288976 1,3631,7181,6051,8411,5401,239 83,40073,20193,101107,424110,453104,226 44,72540,25434,95339,19441,15143,145

5,3354,8734,2414,4884,916 (4) 4,884 1,9701,7321,1478411,134 (4) 1,342 4,2703,0731,3071,1311,2801,664 12,1446,7615592,0196,0476,540

3.939.622.25 ‐ (5) ‐ (5) 2.29 3,7242,0257806844,6173,413

9,0232,6062,3568,70911,15911,749 504276274396397560

308305283273260263 1,2539617421,2321,3101,373 18,34118,57218,74718,83818,92018,999 87158137 8,3418,8238,9508,2657,5748,260

3,0863,0863,2423,2423,2533,256 16,99017,37317,37317,37317,42817,487 669854 7,2957,5986,4006,1306,4716,914

47,57842,667 (8) 35,06731,50628,31426,691 42,24836,75135,96134,48434,18535,967

CITY OF MOUNTAIN VIEW, CALIFORNIA

Capital Asset Statistics by Function/Program Last Ten Fiscal Years

Fiscal Year Ended June 30,

Source: City of Mountain View

(1)The miles of streets are based on the certified report dated May 22, 2019 derived from the updated database.

(2)Includes assets not owned by the City but maintained by the City.

(3)Shoreline Athletic Fields converted 12 acres of Regional park acreage to City parks acreage in Fiscal Year ended June 30, 2016.

(4) Additions of Permanente Creek Trail Rock St to Middlefield Rd and Hetch‐Hetchy Trail between N Whisman Rd and Tyrella Ave.

(5) Includes Adobe Building and Immigrant House beginning Fiscal Year ended June 30, 2017.

(6) Reflects Teen Center as a separate category beginning Fiscal Year ended June 30, 2017

(7) The miles of sanitary sewers are updated based on correction by GIS due to mischaracterization

(8)The City of Mountain View owns treatment capacity at the Palo Alto Treatment Plant.

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Mountain View Shoreline Regional Park Community

A Component Unit of the City of Mountain View, California Basic

For the Fiscal Year Ended June 30, 2024 Prepared by: Finance and Administrative Services Department

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INDEPENDENT AUDITOR’S REPORT

To the Board of Directors

of the Mountain View Shoreline Regional Park Community

Mountain View, California

Report on the Audit of the Financial Statements

Opinions

We have audited the financial statements of the governmental activities and each major fund of the Mountain View Shoreline Regional Park Community (Shoreline Community), a component unit of the City of Mountain View, California (City) as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Shoreline Community’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Shoreline Community, as of June 30, 2024, and the respective changes in financial position thereof and the budgetary comparison for the Shoreline Regional Park Community Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Shoreline Community and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements

The Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

To the Board of Directors of the Mountain View Shoreline Regional Park Community

Mountain View, California

Page 2

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Shoreline Community’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

 Exercise professional judgment and maintain professional skepticism throughout the audit.

 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Shoreline Community’s internal control. Accordingly, no such opinion is expressed.

 Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Shoreline Community’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

To the Board of Directors

of the Mountain View Shoreline Regional Park Community

Mountain View, California

Page 3

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the required pension and OPEB schedules, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Shoreline Community’s basic financial statements. The Shoreline Regional Park Community Fund combining fund statements are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The Shoreline Regional Park Community Fund combining fund statements are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Shoreline Regional Park Community Fund combining fund statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

To the Board of Directors

of the Mountain View Shoreline Regional Park Community

Mountain View, California

Page 4

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated November 22, 2024 on our consideration of the Shoreline Community’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Shoreline Community’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs

Berkeley, California

November 22, 2024

Mountain View Shoreline Regional Park Community Management’s Discussion and Analysis (MD&A) (Unaudited) for the Fiscal Year Ended June 30, 2024

This section of the Mountain View Shoreline Regional Park Community’s (Shoreline Community or SRPC) basic financial statements presents a narrative overview and analysis of the financial activities of the Shoreline Community for the fiscal year ended June 30, 2024. We encourage readers to consider the information presented here in conjunction with additional information that has been furnished in the financial statements and our transmittal letter for the financial statements of the City of Mountain View (City).

FINANCIAL HIGHLIGHTS

The Shoreline Community’s principal revenue source is property taxes, which have historically fluctuated due to economic conditions that have resulted in changes in the commercial vacancy rate and assessed values. For Fiscal Year 2023‐24, property taxes increased by $8.2 million or 13.0%. Fiscal Year 2023‐24 financial highlights include the following:

• The Shoreline Community’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources for the fiscal year ended June 30, 2024 by $124.8 million (net position). Of this amount, $25.8 million reflects its net investment in capital assets, $100.6 million is restricted for Shoreline Community indebtedness, and negative $1.6 million is unrestricted.

• The Shoreline Community’s total net position increased by $26.2 million during the fiscal year compared to the prior fiscal year increase of $15.8 million. The change is primarily due to an $8.2 million increase in property revenues and a $6.1 million rise in investment earnings.

• Revenues of $84.0 million, including program revenues and general revenues, excluding net transfers, are $10.3 million more than the prior fiscal year. As mentioned in the above paragraph, the change is primarily due to higher property tax revenues and higher investment earnings, partially offset by a $4.1 million decrease in capital contributions from the City.

• Shoreline Community expenses are $39.2 million, an increase of $2.7 million over the prior fiscal year.

• Governmental fund balances for the fiscal year ended June 30, 2024 increased $23.0 million to $115.3 million, primarily due to higher property tax revenues, higher investment earnings as a result of unrealized gains, and excess of revenues over expenditures.

• Governmental fund revenues are $78.9 million for the fiscal year ended June 30, 2024, an increase of $14.4 million from the prior fiscal year, primarily from the reasons stated above.

• Governmental fund expenditures are $37.4 million for the fiscal year ended June 30, 2024, an increase of $2.9 million from the prior fiscal year’s expenditures of $34.5 million.

• The Shoreline Community’s total noncurrent liabilities decreased by $2.3 million compared with the prior fiscal year, primarily due to the annual principal payment of bonds.

OVERVIEW OF THE BASIC FINANCIAL STATEMENTS

This discussion and analysis are intended to serve as an introduction to the Shoreline Community’s component unit basic financial statements. The Shoreline Community’s component unit basic financial statements comprise three components: (1) government‐wide financial statements; (2) fund financial statements; and (3) notes to the basic financial statements. This report also contains required and other supplementary information.

Government‐Wide Financial Statements

The government‐wide financial statements are designed to provide readers with a broad overview of the Shoreline Community’s finances in a manner similar to a private‐sector business.

The Statement of Net Position presents information on all of the Shoreline Community’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Shoreline Community is improving or deteriorating.

The Statement of Activities presents information showing how the Shoreline Community’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

Fund Financial Statements

The fund financial statements are designed to report information about groupings of related accounts, which are used to maintain control over resources that have been segregated for specific activities or objectives. The Shoreline Community, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance‐related legal requirements.

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government‐wide financial statements. However, unlike the

government‐wide financial statements, governmental fund financial statements focus on near‐term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in determining what financial resources are available in the near future to finance the Shoreline Community’s programs.

Because the focus of governmental funds is narrower than that of the government‐wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government‐wide financial statements. By doing so, readers may better understand the long‐term impact of the government’s near‐term financing decisions. Both the governmental funds Balance Sheet and the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The Shoreline Community has three individual governmental funds. Information is presented separately in the governmental funds Balance Sheet and in the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances for the SRPC Fund, SRPC 2018 Revenue Bonds Fund, and SRPC 2022 Revenue Bonds Fund, all of which are reported as major funds.

The Shoreline Community adopts an annual appropriated budget for the SRPC Fund. A budgetary comparison statement has been provided for this fund to demonstrate compliance with budget.

Notes to Basic Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the government‐wide and fund financial statements.

Other

Required Supplementary Information includes schedules required to be presented showing information related to the SRPC’s cost‐sharing arrangement with the City’s pension and other postemployment benefits (OPEB) plans.

Other Supplementary Information includes the Combining Statements of the SRPC Fund.

GOVERNMENT‐WIDE FINANCIAL ANALYSIS

The Shoreline Community has presented its financial statements under the reporting model required accounting principles generally accepted in the United States of America. Two years of financial information and a comparative analysis of government‐wide data are included in this MD&A.

Analysis of Net Position

A summary of the Shoreline Community’s net position is as follows:

Condensed Statement of Net Position (Dollars in Thousands)

As noted earlier, net position may serve as a useful indicator of a government’s financial position. For the Shoreline Community, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $124.8 million at the end of the fiscal year. The components of net position are as follows:

• Net investment in capital assets was $25.8 million, which was an increase of $7.3 million compared to the prior fiscal year. This increase was mainly due to increased capital assets and decreased debt outstanding during the current fiscal year.

• Another significant component of the Shoreline Community’s net position is $100.6 million in Restricted for Shoreline Community Indebtedness, which may be used to meet the Shoreline Community’s current and future obligations. The balance increased by $29.5 million from the prior fiscal year.

The Shoreline Community’s current and other assets increased $23.7 million while net position increased $26.2 million compared to the prior fiscal year, primarily due to revenues exceeding expenses by $44.8 million, offset partially by net transfers out to the City of $18.6 million.

Statement of Activities

A summary of the Shoreline Community’s changes in net position is as follows:

Condensed Statement of Activities (Dollars in Thousands)

The major component of the Shoreline Community’s current fiscal year revenues is $71.2 million of property taxes. This is an increase of $8,2 million when compared to the prior fiscal year due to increases in assessed property values. Program revenues were $498,000, consistent with the prior fiscal year. Capital contributions decreased by $4.1 million, primarily due to the significant $2.3 million expenditure on the Shoreline Lake Improvement Project in the prior fiscal year. Investment earnings were $7.3 million, an increase of $6.1 million compared to the prior fiscal year, driven by a rise in the fair market value of the investment portfolio and higher interest income due to elevated interest rates.

Expenses totaling $39.2 million increased $2.7 million when compared to the prior fiscal year. This was attributable primarily to increases in general government.

The change in net position is an increase of $26.2 million compared to the prior fiscal year increase of $15.8 million. The difference is due to the items mentioned above, notably the increases in property tax revenues and investment earnings.

FINANCIAL ANALYSIS OF THE SHORELINE COMMUNITY’S FUNDS

As noted earlier, the Shoreline Community uses fund accounting to ensure and demonstrate compliance with finance‐related legal requirements.

The focus of the Shoreline Community’s governmental funds is to provide information on near‐term inflows, outflows, and balances of resources that are available for spending. Such information is useful in assessing the Shoreline Community’s financing requirements.

As of June 30, 2024, the Shoreline Community’s funds reported combined fund balances of $115.3 million, an increase of $23.0 million from the prior fiscal year. The Committed Fund Balance decreased by $10.5 million while the Restricted Fund Balance increased by $33.5 million when compared to the prior fiscal year. The increase in the Restricted Fund Balance is mainly due to higher property tax revenues, which exceed expenditures as previously noted.

Revenues for the fiscal year ended June 30, 2024 totaled $78.9 million, an increase of $14.4 million, or 22.3%, when compared to the prior fiscal year. The increase is primarily due to increases in property tax revenues and investment earnings during the fiscal year. Expenditures totaling $37.4 million were $2.9 million higher compared to the prior fiscal year.

The SRPC Fund receives tax revenues on properties within the Shoreline Community. The fund accounts for the revenues and expenditures of the Shoreline Community. At the end of the fiscal year, its fund balance was $109.1 million. As a measure of the SRPC Fund’s liquidity, it may be useful to compare the total fund balance to total fund expenditures. The total fund balance represents 349.3% of the total fund expenditures of $31.2 million.

The fund balance of the SRPC Fund increased by $22.8 million during the current fiscal year. Key factors contributing to this increase are as follows:

• Total revenues are $78.6 million in the current fiscal year, an increase of $14.2 million from the prior fiscal year. The increase is primarily attributable to higher property tax revenues and unrealized gains on investment portfolio.

• Expenditures of $31.2 million is moderately higher compared to the prior fiscal year.

• The transfer out to the City increased by $4.9 million, primarily due to increased transfers to the City for capital projects. The transfer in from the City increased by $7.0 million, primarily due to increased refunds from General Capital Projects fund for completed CIP projects.

The SRPC 2018 Revenue Bonds Fund accounts for the resources used for the purpose of paying the principal, interest, and related costs on the SRPC 2018 Revenue Bonds as they become due.

Debt service expenditures included $1.0 million in principal retirement and $3.0 million in interest and fiscal charges for the fiscal year ended June 30, 2024. Both the principal repayment and the interest charges are comparable to the prior fiscal year.

The SRPC 2022 Revenue Bonds Fund was created in Fiscal Year 2022‐23 and accounts for the resources used for the purpose of paying the principal, interest, and related costs on the SRPC 2022 Revenue Bonds as they become due. Debt service expenditures included $1.1 million in principal retirement and $1.0 million in interest and fiscal charges for the fiscal year ended June 30, 2024. There was no principal retirement in the prior fiscal year.

CAPITAL ASSETS

A summary of Shoreline Community’s capital assets is as follows:

Capital Assets (Dollars in Thousands)

For the fiscal year ended June 30, 2024, capital assets, net of accumulated depreciation, totaled $102.5 million, a moderate increase of $1.0 million compared to prior fiscal year. At June 30, 2024, construction commitments were $4.6 million. Additional information about the Shoreline Community’s capital assets is discussed in Note 6 to the Basic Financial Statements.

DEBT ADMINISTRATION

As of June 30, 2024, the Shoreline Community has $87.6 million of outstanding noncurrent liabilities. During the fiscal year, the Shoreline Community’s total long‐term debt decreased by $2.3 million compared with the prior fiscal year, primarily due to the scheduled principal retirement of $2.3 million. Standard & Poor’s (S&P) raised the Shoreline Community’s underlying credit rating from “A” to “A+” in November 2018. The Shoreline Community’s noncurrent liabilities are discussed in Note 7 to the Basic Financial Statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS

Property taxes for the Shoreline Community are expected to increase for the upcoming fiscal year, compared to the July 1, 2023 tax roll, due to the 2.0 CCPI applied to secured property and expected new development added to the tax roll. Property values are rising due to the high development demand in the community, but there are also pending appeals filed by owners of property in the Shoreline Community that could impact future property tax revenues if successful.

REQUESTS FOR INFORMATION

These financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the Shoreline Community’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be directed to the Finance and Administrative Services Department, 500 Castro Street, P.O. Box 7540, Mountain View, California, 94039‐7540, or FinanceAdmin@mountainview.gov.

BASIC FINANCIAL STATEMENTS

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FINANCIAL STATEMENTS

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June 30, 2024

(Dollars in Thousands)

ASSETS

Mountain View Shoreline Regional Park Community Statement

of Activities

For the year ended June 30, 2024 (Dollars in Thousands)

FINANCIAL STATEMENTS

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Mountain View Shoreline Regional Park Community

Governmental Funds

June 30, 2024 (Dollars in Thousands)

(Dollars in Thousands)

Capitalassetsnetofdepreciationhavenotbeenincludedasfinancialresourcesin governmental fund activity.

Interestpayableonlong‐termdebtdoesnotrequiretheuseofcurrentfinancialresourcesand, therefore,interestpayableisnotaccruedasaliabilityinthebalancesheetofgovernmental funds. (1,666)

DeferredoutflowsandinflowsofresourcesforpensionandOPEBitemsingovernmental activitiesarenotfinancialresourcesand,therefore,arenotreportedinthegovernmental funds.

Noncurrentliabilities,includingbondspayable,arenotdueandpayableinthecurrentperiod and therefore are not reported in the governmental funds.

Mountain View Shoreline Regional Park Community

of Revenues, Expenditures and Changes in Fund Balances Governmental Funds

For the year ended June 30, 2024 (Dollars in Thousands)

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government‐Wide Statement of Activities

For the year ended June 30, 2024 (Dollars in Thousands)

Net Change in Fund Balances ‐ Total Governmental Funds 22,989 $

Amounts reported for governmental activities in the Government‐Wide Statement of Activities were different because:

Governmentalfundsreportcapitaloutlayasexpenditures.However,inthestatementofactivities, thecostofthoseassetsisallocatedovertheirestimatedusefullivesandreportedasdepreciation expense.

Capital asset additions ‐ contributions from the City of Mountain View 5,084 Depreciation (4,065)

Transfer of capital assets to the City of Mountain View

Pension and OPEB contributions made subsequent to the measurement date are expenditures in the governmental funds, but reported as deferred outflows of resources in the government‐wide financial statements. 901

Pension and OPEB expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (1,076)

The repayment of principal of long‐term debt consumes the current financial resources of governmental funds. 2,095

Someexpensesreportedin the statementofactivitiesdonotrequiretheuseofcurrentfinancial resources and therefore are not reported as expenditures in governmental funds.

Statement of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual

Shoreline Regional Park Community Fund

For the year ended June 30, 2024 (Dollars in Thousands)

Amounts

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NOTES TO BASIC FINANCIAL STATEMENTS

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Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Mountain View Shoreline Regional Park Community (Shoreline Community) was established in 1969 pursuant to the provisions of the Mountain View Shoreline Regional Park Community Act (Act). The purpose of the Shoreline Community is to provide for the development of approximately 1,550 acres of Bayfront lands.

The Shoreline Community is an integral part of the City of Mountain View (City). The Shoreline Community's Board (Board) is comprised of the same members as the City Council and the City's management has operational responsibility of the Shoreline Community. Therefore, the Shoreline Community is considered a blended component unit of the City and its financial activities are included within the City's annual comprehensive financial report.

The Shoreline Community's primary source of revenue is property taxes, which are computed and allocated to the Shoreline Community as follows:

 The assessed valuation of all property within the Shoreline Community's boundaries is determined and "frozen" for allocation purposes on the date of adoption by the Shoreline Community of a designation of a "base year" assessment roll. Shoreline Community designated the fiscal year ended 1977‐78 as the base year.

 Increments in property taxes resulting from any increase in assessed values after the adoption of the Shoreline Community are allocated to the Shoreline Community; all property taxes on the "frozen" assessed valuation of the property are allocated to the City and other taxing entities receiving taxes within the Shoreline Community's boundaries.

The Shoreline Community has no power to levy or collect taxes. Any legislative property tax reduction would lower the amount of tax revenues that would otherwise be available to pay principal and interest on debt or loans from the City and any increase in the tax rate or assessed valuation or any elimination of present exemptions would increase the amount of tax revenues available for this purpose. The Shoreline Community is also authorized to finance the North Bayshore Plan from other sources, including assistance from the City, the State and federal governments, interest income and the issuance of Shoreline Community debt.

A. Basis of presentation

The Shoreline Community's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). The Governmental Accounting Standards Board (GASB) is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities. These standards require that the financial statements described below be presented.

Government‐wide Statements ‐  The Statement of Net Position and the Statement of Activities display information about the financial activities of the primary government (the Shoreline Community) Eliminations have been made to minimize the double counting of internal activities.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

A. Basis of presentation (Continued)

The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the Shoreline Community's activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, and (b) grants and contributions of capital assets or resources that are restricted for capital purposes. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements ‐  The fund financial statements provide information about the Shoreline Community's funds. The emphasis of fund financial statements is on major individual funds, each of which is displayed in a separate column.

B. Major Funds

The Shoreline Community reports major governmental funds in the basic financial statements as follows:

Shoreline Regional Park Community Fund (General) ‐ This fund receives property tax revenues on properties within the Shoreline Community. The fund accounts for the revenues and expenditures of the Shoreline Community This is the operating fund of the Shoreline Community

Shoreline Regional Park Community 2018 Revenue Bonds Fund (Debt Service) ‐  This fund accounts for the resources used for the purpose of paying the principal, interest and related costs on the Shoreline Regional Park Community 2018 Revenue Bonds (Series A and Series B) as they become due.

Shoreline Regional Park Community 2022 Revenue Bonds Fund (Debt Service) ‐  This fund accounts for the resources used for the purpose of paying the principal, interest and related costs on the Shoreline Regional Park Community 2022 Refunding Revenue Bonds Series A as they become due.

C. Basis of Accounting

The government‐wide, proprietary fund, and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The Shoreline Community considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after fiscal year end.

Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long‐term debt which are recognized as expenditures to the extent they have matured and are due and payable at year end. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds from long‐term debt issuance and acquisitions under capital leases are reported as other financing sources.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

C. Basis of Accounting (Continued)

Non‐exchange transactions, in which the Shoreline Community gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements and donations. On the accrual basis, revenues from property taxes are recognized in the fiscal year for which the taxes are levied. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.

Those revenues susceptible to accrual are property taxes, earned grant entitlements, and investment revenue. All other revenue items are considered to be measurable and available only when cash is received

The Shoreline Community may receive funding for specific programs that is restricted to the operations of these programs. The Shoreline Community also receives unrestricted revenues from different funding sources. When restricted program expenses are incurred, it is the Shoreline Community's policy to first apply revenues from the restricted sources to these programs and then apply unrestricted general revenue. Certain indirect costs are included in program expenses reported for individual functions and activities.

D. Property Taxes

The County of Santa Clara (County) assesses properties and bills, collects, and distributes property taxes to the Shoreline Community The County remits to the Shoreline Community the entire amount levied above the frozen base and handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are levied on July 1 for the fiscal year.

Secured property tax becomes a lien on January 1 and is due in two installments, on November 1 and February 1. It becomes delinquent after December 10 and April 10, respectively. Unsecured property tax bills are distributed in July and are due upon receipt, and become delinquent after August 31. Collection of delinquent accounts is the responsibility of the County, which retains all penalties.

The term "unsecured" refers to taxes on personal property other than real estate, land and buildings and are secured by liens on the property owner. Unsecured may also include the property taxes paid in lieu on leased property. Property tax revenues are recognized by the Shoreline Community in the fiscal year they are levied, provided they become available as defined above.

E. Deferred Outflows and Inflows of Resources

In addition to assets, the Statement of Net Position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

In addition to liabilities, the Statement of Net Position reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

F. Pension and Other Postemployment Benefits (OPEB) Items

For purposes of measuring the net pension liability and net OPEB liability, deferred outflows/inflows of resources related to pension and OPEB, and pension and OPEB expenses, information about the fiduciary net position of the City's Pension and OPEB plans and additions to/deductions from the plans' fiduciary net positions have been determined on the same basis as they are reported by the California Public Employees' Retirement System (CalPERS) and the California Employer's Retiree Benefit (CERBT) Trust Fund, respectively. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. CalPERS plan member contributions are recognized in the period in which the contributions are due. Investments are reported at fair value. The Shoreline Community's financial statements reflect its proportionate share of the Pension and OPEB liabilities, deferred outflows/inflows of resources and expenses.

G. Effects of New GASB Pronouncements

The City adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statements in Fiscal Year 2023‐24:

1. In April 2022, the GASB issued Statement No. 99, Omnibus 2022. The objectives of this statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (a) practice issues that been identified during implementation and application of certain GASB Statements and (b) accounting and financial reporting for financial guarantees. Implementation of these requirements did not have a significant impact on the City’s financial statements for the fiscal year ended June 30, 2024.

2. In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections – An Amendment of GASB Statement No. 62. The primary objective of this statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant consistent, and comparable information for making decisions or assessing accountability. The requirements of this statement did not have a significant impact on the City's financial statements for the fiscal year ended June 30, 2024.

The City is currently analyzing its accounting practices to identify the potential impact on the financial statements for the GASB statements as follows:

1. In June 2022, the GASB issued Statement No. 101, Compensated Absences. The objective of this statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The requirements of this statement are going to be effective for the City’s fiscal year ending June 30, 2025.

2. In December 2023, the GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. The requirements of this statement are going to be effective for the City’s fiscal year ending June 30, 2025.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

G. Effects of New GASB Pronouncements (Continued)

3. In April 2024, the GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. The requirements of this statement are going to be effective for the City’s fiscal year ending June 30, 2026.

H. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

NOTE 2 BUDGETS AND BUDGETARY ACCOUNTING

A. BUDGETS AND BUDGETARY ACCOUNTING

The Shoreline Community adopts an annual budget on or before June 30 for the ensuing fiscal year for the Shoreline Regional Park Community Fund.

No annual budgets are adopted for the Shoreline Community's Debt Service Funds. Repayment of the debt is authorized by the adoption of the indenture provisions for the life of the debt.

Budget appropriations become effective each July 1. The Board may amend the budget during the fiscal year. The legal level of budgetary control has been established at the fund and department level. Appropriations generally lapse at the end of the fiscal year to the extent they have not been expended or encumbered.

The Shoreline Regional Park Community Fund's annual budget is presented on a basis consistent with the basic financial statements prepared in accordance with GAAP.

Budgeted revenue amounts represent the original budget modified by adjustments authorized during the fiscal year. Budgeted expenditure amounts represent original appropriations adjusted for supplemental appropriations during the fiscal year and reappropriated amounts for encumbrances and donations outstanding at the end of each prior fiscal year.

The Shoreline Community's Board must approve appropriation increases to departmental budgets; however, management may transfer Board‐approved budgeted amounts within fund and departmental expenditure classifications. Judgments, settlements and accrual entries are not subject to budgetary control and expenditures exceeding budget due to these items do not constitute a violation of budget policy or control. Supplemental appropriations were approved during the course of the fiscal year as needed.

B. Encumbrance Accounting

Under encumbrance accounting, purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary integration. Encumbrances outstanding at fiscal year end are automatically reappropriated for inclusion in the following fiscal year's budget.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 3 CASH AND INVESTMENTS

A. Classification

Cash and investments are classified in the financial statements, based on whether or not their use is restricted under the terms of debt instruments. Investments are carried at fair value as of June 30, 2024. Cash and investments are as follows (dollars in thousands):

$

The Shoreline Community's cash and investments of $110.0 million are invested in the City's cash and investments pool. Restricted cash and investments are held by bond trustee and are invested in money market mutual funds.

B. Investments in City’s Cash and Investment Policy

The City Council is responsible for the regulatory oversight of the City's cash and investments pool. The City's Investment Policy and the California Government Code permit investments in the following: Securities issued by the U.S. Government or as an agency of the U.S. Government, mortgage‐backed securities, commercial paper, banker's acceptances, medium term notes issued by U.S. corporations, mutual funds invested in U.S. government securities, negotiable certificates of deposit, municipal bonds issued by the City or any of its component units, the Local Agency Investment Fund (LAIF), and Supranational securities.

As of June 30, 2024, the City's cash and investments pool was comprised primarily of investments in securities issued by the U.S. Government and its agencies, medium term notes, supranational securities, LAIF, bonds issued by the Shoreline Community, and money market mutual funds. The City's cash and investments pool is unrated and has a modified duration of 1.88 years. Additional information regarding the interest rate, credit, concentration of credit risks and fair value hierarchy of the City's cash and investments pool can be found in the notes to the City's basic financial statements.

C. Investments Held by Bond Trustee

The Shoreline Community must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of its debt issues. These funds are pledged as reserves to be used if the Shoreline Community fails to meet its obligations under these debt issues. The investment of debt proceeds held by bond trustee is governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City ' s Investment Policy. These debt agreements do not address interest rate, credit and concentration of credit risks.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 3 CASH AND INVESTMENTS (Continued)

C. Investments Held by Bond Trustee (Continued)

The investment types that are authorized for investments held by bond trustee are as follows:

Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City monitors the interest rate risk inherent in its portfolio by measuring the modified duration (modified duration is a measure of a fixed income's cash flows using present values, weighted for cash flows as a percentage of the investments' full price) of its portfolio. The City monitors interest rate risk inherent in investments held by the trustee by using specific identification. The Shoreline Community's investments in money market mutual funds are available for withdrawal on demand and as of June 30, 2024, have an average maturity of less than 60 days.

Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. As of June 30, 2024, the Shoreline Community's investments in money market mutual funds are rated A+ by Standard & Poor's.

Concentration of Credit Risk

The Shoreline Community is required to disclose investments that represent a concentration of 5.0 percent or more of investments in any one issuer other than U.S. Treasury Obligations, money market funds and external investment pools. As of June 30, 2024, none of the Shoreline Community's investments are subject to concentration of credit risk disclosure.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 3 CASH AND INVESTMENTS (Continued)

D. Fair Value Hierarchy

The Shoreline Community categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identi cal assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The Shoreline Community's investment in the U.S. Treasury Obligations are measured using level 2 inputs, while investment in the City's cash and investments pool and money market mutual funds are not subject to fair value hierarchy. Investments measured using level 2 inputs are valued using prices determined by the use of matrix pricing techniques maintained by the pricing vendors for these investments. Matrix pricing is used to value investments based on the investments' relationship to benchmark quoted prices.

NOTE 4 INTERFUND TRANSACTIONS

With Board approval, resources may be transferred from one fund to another. The purpose of the majority of transfers is to allocate resources from the fund that receives them to the fund where they will be spent without a requirement for repayment. For the fiscal year ended June 30, 2024, Shoreline Regional Park Community Fund transferred $3.9 million, and $2.2 million, to the Shoreline Regional Park Community 2018 Revenue Bonds Fund, and Shoreline Regional Parking Community 2022 Revenue Bonds Fund, respectively, to fund debt service payments.

NOTE 5 TRANSACTIONS WITH THE CITY

Transfers Between the Shoreline Community and the City

The City expends funds on capital projects on behalf of the Shoreline Community which transfers the required funds to the City prior to the commencement of the project. Any unspent funds are returned to the Shoreline Community upon completion of the project.

During the fiscal year ended June 30, 2024, the Shoreline Community transferred to the City $25.8 million to fund capital projects, $1.9 million for equipment replacements, and $55,000 for operating costs. The City transferred $9.1 million to the Shoreline Community to return interest earnings on available capital projects balances and unspent funds on completed capital projects.

NOTE 6 CAPITAL ASSETS

All capital assets, including intangible assets, are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are valued at their acquisition value. The Shoreline Community defines capital assets as assets with an initial individual cost of more than $100,000 for land and infrastructure, $25,000 for buildings and improvements other than buildings, and $5,000 for others, and an estimated useful life in excess of two years.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 6 CAPITAL ASSETS (Continued)

Depreciation is provided using the straight‐line method, which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each fiscal year until the asset is fully depreciated. The City has assigned the useful lives to capital assets as follows:

Major outlays for capital assets and improvements are capitalized as projects are constructed.

A. Capital Asset Activities

Capital assets activity for the fiscal year ended June 30, 2024, is as follows (dollars in thousands):

During the fiscal year ended June 30, 2024, the Shoreline Community transferred certain infrastructure including bridges and culverts; sidewalks, curbs and gutters; and streets and roads funded by the Shoreline Community totaling $14,000 to the City in accordance with the Act.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 6 CAPITAL ASSETS (Continued)

B. Depreciation Allocation

Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each governmental activity function for the fiscal year ended June 30, 2024 are as follows (dollars in thousands):

C. Construction Commitments

The Shoreline Community has active construction projects that include land; improvements other than buildings; and infrastructure. Commitments with contractors for construction, as of June 30, 2024, are as follows (dollars in thousands):

NOTE 7 NONCURRENT LIABILITIES

The Shoreline Community generally incurs long‐term debt to finance projects or purchase assets, which will have useful lives equal to or greater than the related debt. The Shoreline Community's debt issues and transactions are summarized below and discussed in detail thereafter.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 7 NONCURRENT LIABILITIES (Continued)

A. Composition and Changes

Noncurrent liabilities activities for the fiscal year ended June 30, 2024, are as follows (dollars in thousands):

Regional Park Community 2022

B. Descriptions of Noncurrent Liabilities

2018 Revenue Bonds Shoreline Regional Park Community ‐  On December 19, 2018, the Shoreline Community issued 2018 Revenue Bonds, Series A (Tax‐Exempt) and Series B (Taxable) (2018 Bonds) of $53.5 million and $10.3 million, respectively. Proceeds from the 2018 Bonds were used to provide funds to acquire and construct certain capital improvements of benefit to the Shoreline Community. The 2018 Bonds are special obligations of the Shoreline Community and are secured by a portion of all taxes levied upon all taxable property within the Shoreline Community Principal payments are payable annually on August 1 and interest payments semi‐annually on August 1 and February 1 from property tax revenues generated within the Shoreline Community. The Shoreline Community is considered to be in default if the Shoreline Community fails to pay the principal of and interest on the outstanding bonds when become due and payable. If an event of default has occurred and is continuing, the trustee may, and if requested in writing by the owners of a majority in aggregate principal amount of the bonds then outstanding, declare the accreted value and principal of the bonds, together with the accrued interest, to be due and payable immediately.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 7 NONCURRENT LIABILITIES (Continued)

B. Descriptions of Noncurrent Liabilities (Continued)

2022 Refunding Revenue Bonds Shoreline Regional Park Community ‐  On November 22, 2022, the Shoreline Community issued the 2022 Bonds of $21.6 million through private placement. Proceeds from the 2022 Bonds were used to fully refund the outstanding 2011 Bonds of $21,100,000. The 2022 Bonds are special obligations of the Shoreline Community and are secured by a portion of all taxes levied upon all taxable property within the Shoreline Community. Principal payments are payable annually on August 1 and interest payments semi‐annually on August 1 and February 1 from property tax revenues generated within the Shoreline Community. The refunding resulted in net present value savings of $1.1 million. The Shoreline Community is considered to be in default if the Shoreline Community fails to pay the principal of and interest on the outstanding bonds when they become due and payable. If an event of default has occurred and is continuing, the trustee may, and if requested in writing by the owners of a majority in aggregate principal amount of the bonds then outstanding, declare the accreted value and principal of the bonds, together with the accrued interest, to be due and payable immediately.

C. Debt Service Requirements

The pledge of future tax increment revenues ends upon repayment of the $142.8 million in remaining debt service on the Shoreline Community's Revenue Bonds, which is scheduled to occur in Fiscal Year 2048‐49. For the fiscal year ended June 30, 2024, tax increment revenues amounted to $71.2 million, which represented coverage of 11.7 over the $6.1 million in debt service.

Annual debt service requirements to maturity are as follows (dollars in thousands):

the Fiscal Year Ending June 30

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 8 PENSION PLANS

A. General Information about the Pension Plans

Plan Descriptions – All qualified regular and probationary employees are eligible to participate in the City's Miscellaneous Plan (Plan), agent multiple‐employer defined benefit pension plan administered by the California Public Employees' Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website at www.cal pers.ca.gov. The Shoreline Community participates in a cost‐sharing arrangement in the City's Plan and a proportionate share of pension balances are allocated to the Shoreline Community.

Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost‐of‐  living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, age at retirement and compensation. The cost‐of‐living adjustments for the CalPERS plans are applied as specified by the Public Employees' Retirement Law. The California Public Employees' Pension Reform Act (PEPRA), which became effective in January 2013, changes the way CalPERS retirement and health benefits are applied, and places compensation limits on members. As such, members who established CalPERS membership on or after January 1, 2013, are known as "PEPRA" members.

The Plans’ provisions and benefits in effect at June 30, 2024, are summarized as follows:

Miscellaneous

Prior toOn or after

Hire Date

Benefit formula

January 1, 2013January 1, 2013

2.7% 552.0% @ 62

Benefit vesting schedule 5 years service5 years service

Benefit payment Monthly for lifeMonthly for life

Retirement age 50+52+

Required employee contribution rates 8.00%7.00%

Required employer contribution rates12.18%12.18%

Contributions – Section 20814(c) of the California Public Employees' Retirement Law requires the employer contribution rates for all public employers to be determined on an annual basis by the CalPERS actuary and shall be effective on the July 1 following notice of a change in the rate. The actuarially determined rate is the projected amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The Shoreline Community is required to contribute its proportionate share of the difference between the actuarially determined rate and the contribution rate of employees. For Fiscal Year 2023‐24, the Shoreline Community recognized $857,000 as contributions for pension.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 8 PENSION PLANS (Continued)

B. Net Pension Liability

The Shoreline Community's net pension liability in the Plan is measured as the proportionate share of the City's net pension liability. The net pension liability of the Plan is measured as of June 30, 2023, and the total pension liability used to ca lculate the net pension liability was determined by an actuarial valuation as of June 30, 2022 using standard update procedures. The Shoreline Community's proportion of the net pension liability was based on the projection of the Shoreline Community's long‐term share of contributions to the pension plan relative to the projected contributions of all participating City funds, actuarially determined.

The change in the Shoreline Community's proportionate share of the net pension liability as of June 30, 2024 and 2023, (measurement dates of June 30, 2023 and 2022, respectively) for the Plan are as follows (dollars in thousands):

Proportion of the City's Miscellaneous Plan Net Pension Liability

Actuarial Assumptions – The total pension liabilities in the June 30, 2022 actuarial valuations were determined using actuarial assumptions as follows:

Misce llaneous Plan

Valuation Date

Measurement Date

June 30, 2022

June 30, 2023

Actuarial Cost Method Entry‐ Age Normal Cost Method

Actuarial Assumptions:

Projected Salary Increase Varies by Entry Age and Service

Post Retirement Benefit Increase

Mortality

The lessor of contract COLA or 2.30% until Purchasing Power Protection Allowance Floor on purchasing power applies, 2.30% thereafter.

Derived using CalPERS Membership Data fo r all Fun d s (1)

(1) The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP‐ 2020 published by the Society of Actu aries. For mo re details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 8 PENSION PLANS (Continued)

B. Net Pension Liability (Continued)

All other actuarial assumptions used in the June 30, 2022 actuarial valuation were based on the 2021 CalPERS Experience Study for the period from 2001 to 2019, including updates to salary increase, mortality and retirement rates. Further details of the 2021 CalPERS Experience Study can be found on the CalPERS website under Forms and Publications.

Change of Assumptions – There were no assumption changes in measurement period 2023.

Discount Rate – The discount rate used to measure the total pension liability was 6.90 percent. The projection of cash flows used to determine the discount rate assumed that the contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long‐term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

The long‐term expected rate of return on pension plan investments was determined using a building‐block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long‐term expected rate of return, CalPERS took into account both short‐term and long‐term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building‐block approach. The expected rate of return was then adjusted to account for assumed administrative expense of 10 basis points. The expected real rates of return by asset class are as follows:

(1) ‐  An expected inflation of 2.30% used for this

(2) ‐  Figures are based on the 2021 Asset

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 8 PENSION PLANS (Continued)

B. Net Pension Liability (Continued)

Sensitivity of the Net Pension Liability to Changes in the Discount Rate ‐  The Shoreline Community's proportionate share as of the measurement date, calculated using the discount rate of 6.90 percent, as well as what the Shoreline Community's net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate are as follows (dollars in thousands):

Shoreline Community's proportionate share of the City's Miscellaneous Plan

C.Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

For the fiscal year ended June 30, 2024, the Shoreline Community recognized pension expense of $1,030,000. The Shoreline Community reported deferred outflows of resources related to pensions by sources for the fiscal year ended June 30, 2024 are as follows (dollars in thousands):

As of June 30, 2024, the Shoreline Community reported $857,000 as deferred outflows of resources related to contributions subsequent to the measurement date which will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2025. Net amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense are as follows (dollars in thousands):

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 9 OTHER POSTEMPLOYMENT BENEFITS

A. General Information about the OPEB Plan

Plan Descriptions – By Council resolution and through agreements with its labor units, the City provides certain health care benefits for retirees (spouse and dependents are not included for CalPERS Miscellaneous employees, but are included for CalPERS Safety employees in the CalPERS Health Program governed by the Public Employees' Medical and Hospital Care Act (PEHMCA)) under a single employer defined benefit OPEB plan. In December 2008, the City entered into an agreement with CalPERS to participate in CERBT, an agent multiple‐employer other postemployment benefits plan, to fund the City's OPEB. CERBT is administrated by CalPERS, is managed by an appointed board not under the control of the City Council. CERBT issues a publicly available financial report that can be found on the CalPERS website at www.calpers.ca.gov. The Shoreline Community participates in a cost‐sharing arrangement in the City's OPEB plan and a proportionate share of OPEB balances are allocated to the Shoreline Community.

The City also offers a Defined Contribution (DC) Plan to eligible miscellaneous employees. If an employee elects to participate in the DC Plan, the City makes contributions on behalf of the employee into a Health Savings Account (HSA). Employees who have elected the DC Plan are not included in the City's actuarial valuation for OPEB.

Benefits Provided – The City provides medical and vision OPEB benefits. Additional information regarding the benefits provided for the City's OPEB plan can be found in the notes to the City's basic financial statements.

Contributions – The City's OPEB funding policy is to contribute 100 percent or more of the actuarially determined contribution each year. For the fiscal year ended June 30, 2024, the Shoreline Community's contributions totaled $44,000.

B. Net OPEB Liability

The Shoreline Community's net OPEB liability in the City's OPEB Plan is measured as the proportionate share of the City's net OPEB liability. The City's net OPEB liability is measured as of June 30, 2023 was determined by an actuarial valuation as of June 30, 2023 using standard update procedures. The Shoreline Community's proportion of the net OPEB liability was based on the projection of the Shoreline Community's long‐term share of contributions to the OPEB plan relative to the projected contributions of all participating City funds, actuarially determined.

The change in the Shoreline Community's proportionate share of the net OPEB liability as of June 30, 2024 and 2023 (measurement dates of June 30, 2023 and 2022, respectively) for the OPEB Plan is as follows (dollars in thousands):

Net OPEB Liability

Proportion of the City's OPEB Plan

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 9 OTHER POSTEMPLOYMENT BENEFITS (Continued)

B. Net OPEB Liability (Continued)

Actuarial Assumptions – The total OPEB liability as of June 30, 2023 were determined using actuarial assumptions as follows:

Valuation Date

June 30, 2023

Measurement Date June 30, 2023

Actuarial Cost Method

Actuarial Assumptions:

Entry‐ Age Normal Cost Method

Discount Rate 5.60% Inflation 2.50%

Projected Salary Increase 3.00%

Healthcare cost trend rates

Mortality

Mortality Improvement

6.5% in 2025, fluctuating down to 3.9% by 2075 2021 CalPERS Experience Study

MW Scale 2022

(1) Demographic actuarial assumptions used are based on the 2021 CalPERS Experience Study fo r the period from 1997 to 2019, except for using the MacLeod Watts Scale 2020 applied generationally from 2015 as the basis to project future morality improvements.

Change in Assumptions – During the measurement period 2023, the healthcare cos trend rates were changed to 6.5 percent in 2025, fluctuating down to 3.9 percent by 2075, Mortality was changed to based on 2021 CalPERS Experience Study, and Mortality Improvement was changed to based on MW Scale 2022.

Discount Rate ‐  The discount rate used to measure the total OPEB liability is 5.6 percent. The projection of cash flows used to determine the discount rate assumed that the City's contribution will be made equal to the actuarially determined contribution. Based on those assumptions, the OPEB plan's fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees. Therefore, the long‐term expected rate of return on OEPB plan investments is applied to all periods of projected benefit payments to determine the total OPEB Liability.

The long‐term expected rate of return for OPEB plan investments is 5.6 percent. Using historical returns of all the funds' asset classes, expected compound geometric returns were calculated over the short ‐term (1‐5 years) and the long‐term (6‐20 years) using a building‐block approach:

The long‐term expected real rate of return by asset class and the target allocation are as follows:

To derive the expected future trust return specifically for the City, we first adjusted CalPERS' future return expectations to align with the 2.5% general inflation assumption used in this report. Then applying the plan specific benefit payments (as determined from the June 30, 2023, valuation) to CalPERS' bifurcated return expectation, we determined the single equivalent long ‐ term rate of return to be 5.60%.

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 9 OTHER POSTEMPLOYMENT BENEFITS (Continued)

B. Net OPEB Liability (Continued)

Sensitivity of the Net OPEB Liability (Asset) to Changes in the Discount Rate – The Shoreline Community ' s proportionate share of the net OPEB liability, calculated using the discount rate of 5.6 percent, as well as what the net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate are as follows (dollars in thousands):

Sensitivity of the Net OPEB Liability (Asset) to Changes in the Healthcare Cost Trend Rates – The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current rate are as follows (dollars in thousands):

C. OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB

For the fiscal year ended June 30, 2024, the Shoreline Community recognized OPEB expense of $44,000. As of June 30, 2024, the Shoreline Community reported $44,000 as deferred outflows of resources related to contributions for OPEB subsequent to the measurement date, which will be recognized as a reduction of the net OPEB liability in the fiscal year ending June 30, 2025.

NOTE 10 RISK MANAGEMENT

The Shoreline Community is covered under the City's insurance program and therefore contributes its proportionate share of cost. The City is exposed to various risks of loss related to torts, errors and omissions, injuries to employees or others, and unemployment. The City has established various self‐insurance programs to account for and finance its uninsured risks of loss. Under the self‐insurance programs, the City retains the risk of loss up to a maximum of $1.0 million for general liability claims, $750,000 for workers' compensation claims with statutory excess insurance and actual costs incurred for unemployment.

For general liability claims, the City has excess liability coverage through the Authority for California Cities Excess Liabilities (ACCEL) to cover the risk of loss for claims in excess of $1.0 million per incident. ACCEL is a joint powers authority of medium‐sized California municipalities, which pools catastrophic general liability, automobile liability and public officials' errors and omissions losses.

Additional information regarding the City's insurance program can be found in the notes to the City's basic financial statements

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 11 NET POSITION AND FUND BALANCES

A. Net Position

Net position is the excess of all assets and deferred outflows of resources over all liabilities and deferred inflows of resources, regardless of fund. Net position is divided into three captions on the Statement of Net Position. These captions apply only to net position, which is determined at the Government‐wide level and are described as follows:

Net investment in capital assets ‐  This caption groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt, including debt related deferred outflows and inflows of resources that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.

Restricted ‐ This caption represents net position, which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws or other restrictions which the Shoreline Community cannot unilaterally alter.

Unrestricted ‐ This caption represents net position of the Shoreline Community not restricted for any project or purpose.

B. Fund Balances

Governmental fund balances represent the assets and deferred outflows of resources less the liabilities and deferred inflows of resources of each fund. Governmental funds report fund balance in classifications based primarily on the extent to which the Shoreline Community is bound to honor constraints on how specific amounts in the funds can be spent. For programs with multiple funding sources, the Shoreline Community prioritizes and expends funds in the following order: Restricted, Committed, Assigned and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint as follows:

Nonspendable fund balances are amounts that cannot be spent because they are either (a) not in spendable form; or (b) legally or contractually required to be maintained intact.

Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation, which requires the resources to be used only for a specific purpose. Nonspendable amounts subject to restrictions are included along with spendable resources. As of June 30, 2024, the Shoreline Community has restricted fund balances of $105.0 million for Shoreline Community indebtedness and $6.2 million for debt service.

Committed fund balances have constraints imposed by resolution of the Board, which may only be altered by resolution of the Board. Nonspendable amounts subject to Board commitments are included along with spendable resources. As of June 30, 2024, the Shoreline Community has committed fund balances of $3.8 million for capital projects.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 11 NET POSITION AND FUND BALANCES (Continued)

B. Fund Balances (Continued)

Assigned fund balances are amounts constrained by the Board's intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the Board or its designees and may be changed at the discretion of the Board or its designees. The Board has not delegated the authority to make assignments of fund balance. This category also includes residual fund balances which have not been restricted or committed.

Unassigned fund balance represents residual fund deficits.

C. Minimum Fund Balance / Net Position Policies

The Shoreline Regional Park Community Special Revenue Fund shall maintain a reserve of 25 percent of operating expenditures; the landfill reserve shall be incrementally increased to accumulate funds to rebuild the landfill system based on the most recent Landfill Master Plan. The reserve shall have adequate balance to rebuild the landfill system, in case of a catastrophic event; and the sea level rise reserve is to be incrementally increased to accumulate funds for projects identified in the most recent Shoreline Sea Level Rise Study. The contributed amount shall be determined annually based on the available resources, timeline of the projects, and results of the Shoreline Sea Level Rise Study

D. Landfill Containment Reserve

In 2013, CalRecycle regulations required the City to create a reserve, in whole or incrementally, for potential corrective actions associated with a non‐water release event at the landfill site. The estimated costs of the corrective actions are adjusted annually by an inflation factor approved by CalRecycle. On June 25, 2013, the City Council approved to restrict funds for landfill containment in the Landfill reserve of the Shoreline Community Fund. The City estimated the costs for the corrective actions to be $1.3 million for the fiscal year ended June 30, 2024, and $12.0 million to rebuild a new landfill system. As of June 30, 2024, the City restricted $12.0 million for landfill containment and planned to increase the balance to accumulate funds to rebuild the landfill system based on the most recent Landfill Master Plan.

NOTE 12 COMMITMENTS AND CONTINGENCIES

A. Encumbrances

The Shoreline Community's outstanding encumbrances as of June 30, 2024, are $332,000 recorded as part of restricted fund balance.

Mountain View Shoreline Regional Park Community

Notes to Basic Financial Statements

For the Year Ended June 30, 2024

NOTE 12 COMMITMENTS AND CONTINGENCIES (Continued)

B. Education Enhancement Reserve Joint Powers Agreement (JPA)

On June 30, 2013, the Shoreline Community entered into an Education Enhancement JPA with the Mountain View Los Altos Unified High School District (MVLAUHSD) and the Mountain View Whisman School District (MVWSD) effective July 1, 2013, for a period of 10 years, superseding any prior agreements dating back to the first such agreement in 2006. The purpose of the Education Enhancement JPA is to create an Education Enhancement Reserve in which funds provided by the Shoreline Community are used to enhance the educational and technology capacity of students in the districts, which will contribute to the availability of a local technology workforce to further the objectives of the Shoreline Community. The agreement provides for minimum annual payments, which commenced with the fiscal year ended June 30, 2014, and have increased annually based on growth in property tax revenues in the preceding fiscal year. Each subsequent fiscal year increases based on growth in property tax revenues in the preceding fiscal year. For the fiscal year ended June 30, 2024, the Shoreline Community paid a total of $10.7 million in contributions to the school districts, including $6.5 million to MVWSD and $4.2 million to MVLAUHSD.

A one‐year successor agreement was executed in June 2023 for the period of July 1, 2023 through June 30, 2024. An amendment was subsequently executed in Oct 2024, extending the agreement through June 30, 2027.

C. Tax Revenue Sharing

Pursuant to an agreement between the City, the Shoreline Community, and the County dated June 22, 2005, the Shoreline Community is annually obligated to pay the County from tax revenues, an amount equal to the County’s total retirement tax override levies and pass‐through an additional amount of taxes that would have been allocated to the County in the absence of the existence of the Shoreline Community. For the fiscal year ended June 30, 2024, $2.4 million and $3.1 million in retirement tax override levies and pass‐through payments, respectively, were paid to the County.

Mountain View Shoreline Regional Park Community

Required Supplementary Information

For the year ended June 30, 2024 (Dollars in Thousands)

Schedule of the Shoreline Community Pension Contributions

Fiscal Year Ended June 30,

Theactuarialmethodsandassumptionsusedtosettheactuariallydeterminedcontributionsforthefiscal year ended June 30, 2024 were as follows:

ADC for fiscal year

June 30, 2024

Actuarial valuation date June 30, 2021

Actuarial cost method Entry‐Age Normal Cost Method Asset valuation method Actuarial value of assets

Investment rate of return

Retirement age

Mortality improvement

4.50%, net of pension plan investment and administrative expenses, includes inflation.

The probabilities of retirement are based on the 2021 CalPERS Experience Study.

The probabilities of mortality are based on the 2021 CalPERS Experience Study.

Mountain View Shoreline Regional Park Community

Required Supplementary Information

For the year ended June 30, 2024 (Dollars in Thousands)

Note to schedule:

ChangeInassumptions‐ Duringmeasurementperiod2019,thediscountratewasreducedfrom6.50%to6.25%. Demographicassumptionswerechangeinaccordancetothe2017CalPERSExperienceStudy.Thereisnochangein assumptionsduringmeasurementperiod2020.Duringthemeasurementperiod2021,thediscountratewasreduced from6.25%to6.00%.Inflationratewasreducedfrom2.75%to2.50%.Otherassumptionsincludingprojectedsalary increase,postretirementbenefitincrease,andotherdemographicassumptionswerealsochanged.Duringthe measurementperiod2022,thediscountratewasreducedfrom6.00%to5.60%.Duringthemeasurementperiod 2023,thehealthcarecostrendrateswerechangedto6.5%in2025,fluctuatingdownto3.9%by2075,Mortalitywas changedtobasedon2021CalPERSExperienceStudy,andMortalityImprovementwaschangedtobasedonMW Scale 2022.

*FiscalyearendedJune30,2018wasthefirstyearofimplementationofGA5BStatementNo.75,thereforeonly SEVEN years of information is shown.

Mountain View Shoreline Regional Park Community

Required Supplementary Information

For the year ended June 30, 2024 (Dollars in Thousands)

Note to schedule:

BenefitChanges‐ Thefiguresabovegenerallyincludeanyliabilityimpactthatmayhaveresultedfromvoluntary benefitchangesthatoccurredonorbeforetheMeasurementDate.However,offersofTwoYearsAdditionalService Credit(a.k.a.GoldenHandshakes)thatoccurredaftertheValuationDatearenotincludedinthefiguresabove,unless theliabilityimpactisdeemedtobematerialbytheplanactuary.In2022,SB1168increasedthestandardretireelump sumdeathbenefitfrom$500to$2,000foranydeathoccurringonorafterJuly1,2023.Theimpact,ifany,isincluded in the changes of benefit terms.

Fiscal year ended June 30, 2015 was the first year of implementation of GASB Statement No. 68.

ChangeInassumptions‐ Duringmeasurementperiod2014,thediscountratewas7.50%.Duringmeasurementperiod 2015,thediscountratewasincreasedfrom7.50%to7.65%.Thereisnochangeindiscountrateduringmeasurement period2016.Duringmeasurementperiod2017,thediscountratewasreducedfrom7.65%to7.15%.During measurementperiod2018,demographicassumptionsandinflationratewerechangedinaccordancetothe2017 CalPERSExperienceStudy.Therewerenochangesinassumptionsduringmeasurementperiods2019,2020,and2021. Duringmeasurementperiod2022,thediscountratewasreducedfrom7.15%to6.90%,inflationratewasreduced from2.50%to2.30%,anddemographicassumptionswerechangedinaccordancewiththe2021CalPERSExperience Study. There were no changes in assumptions during measurement period 2023.

Mountain View Shoreline Regional Park Community

Required Supplementary Information

For the year ended June 30, 2024 (Dollars in Thousands)

Schedule of the Shoreline Community OPEB Contributions

Fiscal Year Ended June 30,

Theactuarialmethodsandassumptionsusedtosettheactuariallydeterminedcontributionsforthefiscalyearended June 30, 2023 were as follows:

ADC for fiscal year

June 30, 2024

Actuarial valuation date June 30, 2023

Actuarial cost method Entry‐Age Normal Cost Method

Post Retirement Benefit Increase

Mortality

Mortality Improvement

For medical plan premiums: 6.50% for the year beginning, fluctuating down to 3.90% by 2075

Based on 2021 CalPERS Experience Study

Based on MacLeod Watts Scale 2022

*Fiscal year ended June 30, 2017 was the first year of implementation of GASB Statement No. 75, therefore only eight years of information is shown.

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OTHER SUPPLEMENTARY INFORMATION

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Mountain View Shoreline Regional Park Community

Shoreline Regional Park Community Fund

June 30, 2024

The AdministrativeFund inaccordancewiththeAct,accountsformoneysmaybetransferredfromtheSpecialFundfor deposit to pay for the administrative expenses and overhead of the Shoreline Community.

The SpecialFund inaccordancewiththeAct,accountsforalltaxrevenuesreceivedbytheShorelineCommunityare depositedintheSpecialFundandwillbeusedtopaytheprincipalofandinterestonloans,advances,orother indebtedness of the Shoreline Community.

The NorthBayshoreImpactFeeFund accountsfortherevenuescollectedforfeesadoptedtoassistwithfunding improvements in the Shoreline Community.

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Combining Balance Sheet

Shoreline Regional Park Community Fund

June 30, 2024 (Dollars in Thousands)

Mountain View Shoreline Regional Park Community

Combining Statement of Revenues, Expenditures and Changes in Fund Balances

Shoreline Regional Park Community Fund

For the year ended June 30, 2024 (Dollars in Thousands)

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Independent Auditor’s Report

Board of Directors of the Mountain View Shoreline Regional Park Community City of Mountain View, California

We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the Mountain View Shoreline Regional Park Community (Shoreline Community), a component unit of the City of Mountain View (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Shoreline Community’s basic financial statements, and have issued our report thereon dated November 22, 2024.

Report on Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Shoreline Community’s internal control over financial reporting (internal control) as a basis for designing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Shoreline Community’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Shoreline Community’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Board of Directors of the Mountain View Shoreline Regional Park Community

City of Mountain View, California

Page 2

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Shoreline Community’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Badawi & Associates, CPAs

Berkeley, California

November 22, 2024